2018 Global Overview of Homes by Pavel Marceux
Recently Euromonitor International have published an interesting report run by the household specialist Pavel Marceux. The 2018 Global Overview of Homes provides a top-line overview of home profiles and trends related to physical characteristics (rather than profiles of their inhabitants). The report contains a global outlook that examines worldwide trends in homes, followed by key trends, regional snapshot and rankings of key indicators. Some of the primary indicators analysed in the report include households by location, possession of household durables, household size, dwelling type, homes by tenure, homes by construction year and house completions.
In the report it is outlined that technology, urbanisation and economics are reshaping the behavioural patterns of inhabitants and creating new channels of access to consumers. A new rising middle class in emerging economies is embracing modern, urban lifestyles, technology is connecting homes to retailing ecosystems, and fewer residents per household are reshaping the way homeowners utilise their space.
The 2018 Global Overview of Homes looks at trends related to physical characteristics in homes and examines how households are rapidly changing in terms of size, location and facilities.
Key Findings
Urbanisation:
Urbanisation shifts the demographics and economics of consumption and lifestyles. Almost every country globally continues to see urban growth with knock-on effects on homes. This change is seen in the rising prices for real estate, smaller homes due to congested and more expensive spaces and better home connectivity due to cheaper and better access to telecoms and digital services.
Internet:
The rapid globalisation of Internet access is digitalising households at an unprecedented rate. By 2030, the majority of the world’s homes will have unlocked access to services including online video, gaming, gambling, social media, e-commerce, banking, e-health and e-education.
Falling birth rates:
Fewer people are having children, and those having children are having fewer. Large, extended families are becoming less commonplace, with homes having more space for amenities, appliances and other leisurely or practical uses.
Population growth:
Despite lower childbirths, the global population continues to grow in size, thereby driving demand for new homes. The overall number of homes is expanding, with new developments (primarily in apartments) stretching state resources in terms of infrastructure like water and electricity.
Rising incomes:
In many countries, particularly in the developing world, household incomes are expanding due to economic growth and improved job opportunities. This is enhancing demand for appliances, durables and general home goods and services.
Areas of opportunity
Rapidly urbanising households in emerging markets:
Newly urbanised households are flourishing as they aspire to fulfil possibilities unavailable to them previously in less advanced rural areas. Urbanised households are especially relevant in emerging markets with a rapid pace of urbanisation. Urban hubs in China have become springboards for a rising middle class, who have new tastes and demands for a more westernized diet. This has fueled dairy and meat producers, a non-traditional food segment in China, to develop major markets in Chinese cities. Amazon’s internet retail operations in India is also taking advantage of the demand for goods in highly urbanised areas. Delivery and logistics in these areas are much easier than in rural regions. The digital readiness of consumers is higher in hyper-urban zones, adding greater potential for using e-commerce platforms.
A new era of digital engagement:
Technology affordability and wider usage are driving home demand for greater digital features, including smart TVs, energy-saving devices and general household appliances. Homeowners are buying more domestic durables, such as fridges, air conditioners and microwaves, which creates opportunities for companies to provide smart-home services and upsell smarter durables. E-commerce and payments will drive these purchases.
Home finance for aspiring homeowners:
Urbanisation, a larger banked population and improved credit regulation is enhancing both demand for and access to home finance instruments. Meanwhile, mortgage markets mature, and banks provide more attractive rates to homebuyers. The world’s largest mortgage markets, led by India, will see surging growth rates in mortgaged households to 2030, opening up opportunities for banks and finance companies.
Conclusion
The rapid pace of urbanisation, technology affordability and rising incomes are the major factors that will continue to pioneer growth in urban and rural households through 2030.
Urbanisation is shifting demographics, lifestyle and economics of consumption in almost every country globally. Rural households are not contracting, but urban hubs are expanding at a much faster pace due to factors such as immigration. By 2030, some 5.0 billion will be living in 1.7 billion urban households.
The global population continues to grow, despite lower childbirths, and households are shifting from houses and mortgages to apartments and rentals. The rise of the middle class in emerging economies is impacting the boom in apartments as they embrace modern, urban lifestyles. Although, houses will remain the predominant dwelling globally, outnumbering apartments two to one. In new megacities, such as China’s Wuhan, households are evolving as they undergo rising standards of living and upgrade their product portfolio.
The depletion of interest rates and better regulated financial systems enable more home-seekers to finance a home, directly impacting the standard of living. The appeal of premiumisation is increasing in popularity among consumers, which has influenced homeowners to spend more money on household goods. Additionally, the younger segment of the population is willing to spend more on rent and pay a premium for trendy household goods.
The future of homes will increase in both size and connectivity as more households are able to afford smart devices, driving home demand for greater digital features. Companies looking to capitalise on households must embrace these global shifts and find new ways to reach and appeal to these changing consumer preferences.
