The retirement of Baby Boomers and the debut of Generation Z workers, along with other demographic shifts, has major implications for real estate occupiers, investors and policy-makers around the world according to a new global research report from Cushman & Wakefield (NYSE: CWK). All stakeholders need to understand the impacts of these trends and how to position themselves to maximise opportunities.
Entitled “Demographic Shifts: The World in 2030”, the report analyses the seismic shifts in workforces worldwide as 693 million Baby Boomers reach retirement age and 1.3 billion members of Gen Z enter the labour force over the next 10 years.
The report looks at the different approaches to work and lifestyle taken by Baby Boomers, Millennials and Gen Z around the world, and the impact on the world’s cities over the next decade as one generation exits the workforce and another enters.
“These demographic trends will drive the pace of growth in cities around the world,” said Dr. Dominic Brown, report author and Head of Insight & Analysis, Asia Pacific at Cushman & Wakefield. “Cities will need to establish themselves as ‘places’ to attract the highest quality workers and in turn create the greatest real estate opportunities for occupiers and investors alike.”
Cushman & Wakefield compared labour force growth and GDP growth of more than 137 cities worldwide. Cities with high growth in both categories have the best prospects for strong real estate demand, while slow growth in both categories indicates a lagging market. Cities with faster growth in GDP than in the working-age population are “high productivity” markets that may appeal to investors as they rise up the value proposition. Those with greater growth in labour than GDP are considered “low productivity” markets need to harness that attraction of talent to boost output.
The study concluded that the world’s top-performing cities are located in South East Asia and India, which bodes well for the economic growth and strength of real estate markets in these areas. High productivity cities are located mainly in China. Most cities in Europe and North America – more mature markets – ranked as low productivity or lagging markets for economic and real estate growth and their trajectories need to be assessed accordingly.