“Potential Demand for Housing in Age”developed with Empirica
The potential demand for age-appropriate housing is set to change in the coming years. This has several reasons: The number of senior-citizens will increase significantly as the baby-boomer generation reaches retirement age. Because so many people will attain an advanced age, even with unchanged income and wealth distribution, more households will potentially be interested in an age-appropriate apartment. In addition, the income and wealth situation of older people will also continue to change in the future. In particular, differences in income and wealth are likely to increase. For this reason, TERRAGON and its “Potential Demand for Housing in Age” study, is not calling for just more, but above all, a variety of offers for age-appropriate housing that are tailored to different income levels.
In order to determine the need for age-appropriate housing, TERRAGON has carefully examined current and future seniors. Today's retirees belong to the richest generation of retirees of all time – pension reductions introduced over the last few years will only affect future retirees. Here, according to TERRAGON, it will increasingly depend on whether and how the future retirees have prepared for retirement.
Moreover, thanks to medical advances, we are becoming healthier and fitter – and stay this way longer. It is not surprising, therefore, that nearly two-thirds of those aged 65 years and above would consider moving house one more time. Whereas around 38.8 percent of the 65+ generation do not want to relocate, 32.6 percent are planning to move into a new, often smaller and age-appropriate home after turning 50, however usually only after retiring.
Seniors certainly have high expectations for their new homes. Above all they want to live in central locations with well-established infrastructures. Everyday shops and services, public transport and medical care should all be within walking distance. At the same time, they also want convenient access to leisure activities, culture and places to meet other people. In addition, older people now attach greater importance to a high quality of life. Housing should not be on the outskirts, but rather they seek integration into residential neighborhoods, where all generations live together.
TERRAGON is sure that the trend towards age-appropriate housing will continue, and it will consolidate for the long term at the end of the 2020s. Thus, there is every reason to expect a sustainable demand and value appreciation of age-appropriate real estate. This is especially true when providers take account of groups with different purchasing power and make differentiated offers. Lower-priced apartments do not have to be qualitatively worse in this case; rather, considerable price differentiation can be achieved by offering facilities in a variety of apartment sizes and locations. If income inequality among the elderly increases in the future, this just means that broad product and price differentiation will be required, which, if the concept is well developed, can be successfully placed on the market at a variety of price levels.