Residential Real Estate Market Size, Share & Trends Analysis Report By Budget (Less Than USD 300,000, USD 300,001 to USD 700,000, USD 700,001 to USD 1,000,000, USD 1,000,001 to USD 2,000,000, More Than USD 2,000,000), By Size (Less Than 50 square meters, 51 to 80 square meters, 81 to 110 square meters, 111 to 200 square meters, More Than 200 square meters) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global residential real estate market was valued at USD 9,743.32 billion in 2023. It is expected to reach USD 21,513.48 billion in 2032, growing at a CAGR of 9.20% over the forecast period (2024-2032). As the global population continues to grow and urbanize, there is increasing demand for residential properties in urban centers and metropolitan areas. This demographic trend drives housing development and investment in real estate.

Urbanization in developing nations is primarily responsible for driving the residential real estate market. Rural communities and small towns residents are moving to urban areas to raise their living levels. Cities have expanded as a result of an increase in nearby industries. Furthermore, governments in many countries, like the U.S. and Australia, provide real estate loans with lower interest rates for long-term borrowers and discounts for first-time homebuyers. To entice purchasers, the governments of several other countries, including Poland, the United States, and Canada, offer programs like Golden Visa and inexpensive housing schemes. Additionally, many tourist attractions in nations like France, the Netherlands, Dubai, Singapore, and Malaysia draw those looking to acquire real estate.

Market Dynamics

Global Residential Real Estate Market Drivers

Growing Cities in Emerging Nations

People have migrated to big cities for a better living due to urbanization in nations like Brazil, Argentina, South Africa, India, and China. For instance, the World Bank estimates that Africa's urbanization rate was 36% in 2010 and will increase to 50% by 2030 due to economic growth. The National Academy of Economic Strategy predicts that China's urbanization rate will reach 70% by 2035. As a result, there would be a rise in demand for residential real estate, which is anticipated to boost the market in these emerging nations' major cities. Additionally, developing countries attract more international investment when businesses and tourism grow due to urbanization.

Global Residential Real Estate Market Restraint

Overconsumption in Wealthy Countries

All large cities in developed nations have reached a point of saturation where the growth of the urban area and the economy has either stopped or is growing at a prolonged rate. For instance, the residential real estate market in the United States saw a decline in the rate of sales of residential properties in significant cities like Washington, D.C., as a result of an increase in property values and a decrease in investments by foreign investors. In addition, the emergence of other cities with lower business and living costs is caused by overpopulation, pollution, and poor management of local governing bodies in certain cities. This causes a demand-supply imbalance for residential homes, which limits market expansion.

Global Residential Real Estate Market Opportunities

Establishing New Planned Cities and Growing Existing Ones

The overpopulation of major cities has forced governments to either plan for a brand-new metropolis or to enlarge the boundaries of existing ones to balance economic growth across the nation. For instance, the Indian government has announced the creation of new cities comprising, residential, and industrial regions, such as Dream City in Gujarat, Vikram City in Madhya Pradesh, New Town in Kolkata, and New Kanpur City. Similarly, the South Korean government has chosen to build two new cities to balance the expansion of the Gangnam and Gangbuk regions. Such city growth and establishment plans encourage migration, which raises investor demand for residential real estate. As a result, these characteristics present profitable chances for market expansion.

Regional Analysis

The global residential real estate market is divided into four regions: North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant revenue contributor and is expected to exhibit a CAGR of 9.80% during the forecast period. In Asia-Pacific, this research analyses four major nations: China, India, Japan, South Korea, and the rest of Asia-Pacific. Asia-Pacific dominates the market. Due to reasons like urbanization, which encourages an increase in the building of residential infrastructure, nations like China, India, Singapore, and South Korea have come to be recognized as significant markets. Sun Hung Kai Properties, DLF Limited, and IJM Corporation Berhad are three considerable market participants in the Asia-Pacific region. Asia-Pacific nations, including China, Japan, India, and South Korea, have experienced rapid urbanization, which has boosted the region's residential real estate industry. High returns on investment from sales and rentals are another factor driving investment in the Asia-Pacific residential real estate sector.

North America is expected to exhibit a CAGR of 8.50% during the forecast period. Three nations - the United States, Canada, and Mexico are the subjects of this study on the North American residential real estate market. In 2019, North America's market came in second. In 2019, the U.S. held a sizable portion of the industry, while Mexico is anticipated to rise quickly over the next few years. People are increasingly choosing to buy their own homes rather than rent them, thanks to the high per capita income rates in the United States and Canada. In addition, many prefer to invest in homes since they can generate more significant returns in the future due to higher rents in developed and developing areas. These elements fuel the North American market.

The European market report examines major European nations, including Spain, Germany, Portugal, France, Greece, the U.K., Italy, and the rest of Europe. The  market in Europe came in third. In 2019, most of this market's revenue came from the rest of Europe. Due to the expansion of their economies, nations like Germany, France, and the U.K. have been known as significant residential real estate markets. The market's major players are Christie's International Real Estate, Engel and Volkers AG, Savills, and Vinci. In addition, the demand for real estate is growing due to population expansion, historically low borrowing costs, improved job stability, and international tourists in some European nations.

African, Middle Eastern, and Latin American nations are called LAMEA. In the 2019 residential real estate market, LAMEA was in fourth place. LAMEA dominated this market, and UAE is predicted to rise quickly throughout the projection period. Nations like Brazil, Argentina, Chile, and Peru are developing rapidly in the region. In addition, Ghana, Uganda, and Nigeria are urbanizing the area. At the same time, other Middle Eastern countries like Kuwait, Egypt, and others have experienced a noticeable rate of urbanization during the past ten years. The urbanization of developing nations in Latin America and Africa has prompted the construction of residential infrastructure and housing projects. Additionally, assistance from governments in the form of tax breaks is anticipated to strengthen the LAMEA market.

Segmental Analysis

The global residential real estate market is segmented by budget and size.

Based on budget, the global market is bifurcated into less than USD 300,000, USD 300,001 to USD 700,000, USD 700,001 to USD 1,000,000, USD 1,000,001 to USD 2,000,000, and More Than USD 2,000,000.

The less than USD 300,000 segment is the highest contributor to the market and is estimated to exhibit a CAGR of 8.60% during the forecast period. In metropolitan cities like New York, Berlin, and Madrid, sales of studio apartments and small flats have increased primarily due to the extremely high rentals for larger homes in these places. People tend to live in smaller places in these locations because they are urban areas with expensive rents. The market for residential properties that cost less than USD 300,000 is also anticipated to grow throughout the projected period due to increased tourism and urban growth.

In cities like Mumbai, Boston, and London, with high population density, individuals have chosen to live in flats since there is a need for more room. Around two-thirds of people in big cities worldwide reside in apartments, typically closer to their places of employment, to reduce commuting time. During the projection period, the market for residential properties priced between USD 300,001 and USD 700,000 is anticipated to be driven by the growth of these cities and government initiatives for affordable housing.

Residential real estate in this class ranges in price from USD 700,001 to USD 1,000,000 and comprises huge flats and bungalows. Large-scale housing construction is permitted in smaller cities and villages. As a result, compared to metro cities with larger population densities, properties constructed in such towns are typically sparse. The price of residential houses increases due to the increased space. As a result, it is predicted that the number of homes priced between USD 700,001 and USD 1,000,000 will increase throughout the forecast period.

Between USD 1,000,000 and USD 2,000,000 is the price range for residential properties with more room and remarkably high facilities. The high per capita income of people in industrialized countries has also contributed to a trend of upgrading homes by purchasing larger homes. The market for residential homes priced between USD 1,000,000 and USD 2,000,000 is expected to rise, which would help the market throughout the projected period.

Based on the size, the global market is bifurcated into less than 50 square meters, 51-80 square meters, 81 - 110 square meters, 111 - 200 square meters, and more than 200 square meters.

The less than 50 square meter segment is the major contributor to the market and is estimated to exhibit a CAGR of 9.90% during the forecast period. Due to the high pricing of residential properties, people who live in upscale areas of cities like Madrid, Seattle, Delhi, Beijing, and Paris prefer to live in smaller rooms. For instance, in the metropolitan areas of Wan Chai and Sham Shui Po in Hong Kong, sales of nano apartments—apartments smaller than 20 square meters—rose in 2016 and 2017. Additionally, almost one-third of residents in the world's most prestigious cities reside in small flats. Due to this, sales of studio apartments and smaller flats have increased, and this trend is anticipated to remain during the projected period.

The middle class and upper middle class can afford large-sized apartments. In addition, the demand for homes in this category is rising as cities grow. Additionally, as cities' populations have changed due to urbanization and development, so requires such apartments. For instance, in Mumbai, India's population grew from more than 185 million in 2011 to more than 204 million in 2020. Consequently, there will be an increase in demand for residential buildings.

The area features luxurious homes and flats. People have chosen to purchase larger living spaces as opposed to small apartments as per capita income has increased along with population growth and the number of families. Additionally, those who can afford it choose to purchase bungalows. As a result, sales of homes between 81 and 110 square meters have increased. Additionally, as people's standards of living rise, it is anticipated that the market share for homes between 81 and 110 square meters will climb.

The typical range for building larger homes and smaller villas is 111 to 200 square meters. Larger bungalows and villas are often where the elite class resides. As a result, sales of larger homes and villas have increased worldwide over the past several years. Additionally, it was shown that Canadians favored residences that were roughly 160 square meters in size on average. Like Americans, Europeans prefer homes 120 to 130 square meters in size. Additionally, sales of homes between 111 and 200 square meters during the forecast period are anticipated to increase due to rising per capita incomes in both developed and emerging nations.

Large villas constructed in this category and measuring more than 200 square meters are typically purchased by members of the ultra-elite class and hotels that rent out villas to tourists afterward. Additionally, there has been engaging in purchasing vacation houses and weekend getaways. As a result, developers are creating opulent projects in smaller, more rural areas and towns surrounding major cities. Additionally, according to trends, there has been an increase in demand for big, opulent bungalows and villas in recent years in places like Saudi Arabia and the United Arab Emirates.

Recent Developments

• February 2024 - According to its "plans of scaling up the business," real estate giant DLF announced its intentions to introduce new properties totaling about 32 million square feet, with a sales potential of nearly ₹80,000 crores, over the course of the next three to four years. The major launches for the next twelve to fifteen months are anticipated to take place in Gurugram, Chennai, Goa, and Mumbai.
• May 2024 - Mintos announced the debut of its newest offering: passive rental real estate investments. The platform offers a unique blend of classic and alternative investment opportunities. This new product is an easy, low-cost, and readily available way for investors to get into the real estate market. Mintos makes residential real estate investment more accessible by lowering the minimum investment to €50 and offering projected returns of 6 to 8% per year.