The elderly population in every corner of the world is growing, and at 71 years the average human life expectancy is the highest it’s ever been. According to the United Nations, the global population over the age of 60 years…
The elderly population in every corner of the world is growing, and at 71 years the average human life expectancy is the highest it’s ever been. According to the United Nations, the global population over the age of 60 years is projected to increase at a rate of 56 percent between 2015 and 2030. Close to 1.4 billion people in the world will be over the age of 60 by 2030, and by 2050, this number will have increased to 2.1 billion.
The world’s senior population is growing more rapidly than any other age group, especially in urban areas. This demographic shift has brought to the fore a need for planning and investment that can enable retirement-friendly lifestyles, availability of senior housing, and affordable geriatric and medical care services.
Currently, the global market for geriatric care services is growing at a CAGR of 7 percent and is expected to cross $1.1 trillion by the year 2022. At-home care and institutional care services are leading the geriatric care services market share, and will continue to expand over the next decade.
In North America, the elderly care market is valued at $530 billion. The United States already has an estimated 4,800 adult day-care centres, 12,200 at-home health agencies, 3,700 hospices, 15,700 nursing homes, and 22,2001 residential care communities. This supply is not nearly enough to meet future demand, and the market is drawing in more investors, as revenues increase and the sector continues to experience comparatively less volatility. According to the National Investment Centre, senior housing has experienced a unique resilience in the commercial real estate market as a result of its dual components of real estate combined with needs-driven services. Law firm Akerman LLP’s sixth U.S. Real Estate Industry Outlook Report expects senior living to remain the second most active segment within multifamily housing.
Asia Pacific’s elderly care market is valued at over $90 billion and is expected to see the most rapid growth among all regions, with private and foreign capital investment having increased in this market over the past year. China is taking steps to prepare for the imminent increase in demand for geriatric care services. In Shanghai for instance, the government is actively working to develop the senior care industry and local and state-owned businesses are investing in community home care programmes for the elderly.
Savills Research reported that the investment volume in senior living in Europe increased by 60 percent in 2016, compared to the same time period in 2015. Portfolio deals have increased and the overall investment volume was recorded at over $3 billion last year. As healthcare spends in the region increase, coupled with an ageing population, Europe is seeing this alternate asset become mainstream.
Globally, at-home healthcare services, assisted living, and elderly care communities are all gaining popularity, with support from both public and private institutions. And despite significant growth and investment, the elderly care services industry will still have to overcome challenges such as affordability and availability in the years to come.
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