Residential Real Estate Market Analysis

Global Residential Real Estate Market Overview

Residential Real Estate Market Size was valued at USD 185.5 Billion in 2022. The Residential Real Estate industry is projected to grow from USD 232.2 Billion in 2023 to USD 1402.1 Billion by 2032, exhibiting a compound yearly growth rate (CAGR) of 25.20% during the forecast period (2023 - 2032). Population growth and the prevailing low-interest-rate environment are the key market drivers enhancing market growth.

Source: The Secondary Research, Primary Research, MRFR Database and Analyst Review

Residential Real Estate Market Trends

• Population growth is driving the market growth

Market CAGR for residential real estate is being driven by population growth. It is a fundamental and influential driver of the residential real estate market, impacting various facets of supply and demand dynamics, pricing trends, and overall market conditions. As the population expands, the demand for housing naturally intensifies, creating a ripple effect that significantly shapes the residential real estate landscape.

At its core, population growth translates into an increased need for housing units to accommodate a growing number of individuals and households. This surge in demand often outpaces the existing housing supply, leading to higher occupancy rates and a need for additional residential properties. The pressure on the market to meet this demand contributes to rising property values and, in turn, fuels real estate development. As more people move into an area, whether due to natural population growth or migration, the demand for various types of housing also evolves. This diversification of housing needs, from single-family homes to multi-family units and apartment complexes, stimulates construction and development activities. Real estate developers respond to this demand by initiating new projects, thereby driving economic growth in the construction sector and related industries. Population growth has a cascading effect on the local economy, influencing job creation, income levels, and consumer spending patterns. With an expanding population, there is often an increased need for commercial and retail spaces, healthcare facilities, educational institutions, and infrastructure development. This economic growth, in turn, attracts more individuals to the area, creating a self-reinforcing cycle that further boosts the demand for residential real estate.

In regions experiencing population growth, real estate becomes an attractive investment opportunity. Investors recognize the potential for capital appreciation as property values tend to increase in response to heightened demand. This investor interest can further contribute to the development of residential properties, including both traditional and innovative housing solutions to cater to diverse demographic needs. Additionally, population growth influences lending and mortgage markets. Financial institutions may be more willing to provide housing loans in areas with expanding populations, as these regions are perceived as having a lower risk of housing market stagnation. This availability of credit facilitates homeownership and encourages more individuals to enter real estate market. While population growth generally exerts upward pressure on housing demand and property values, sustainable development practices and proactive urban planning are crucial to ensuring that the real estate market effectively meets the evolving needs of a growing population while maintaining long-term stability and affordability. Thus driving the Residential Real Estate market revenue.

Residential Real Estate Market Segment Insights

Residential Real Estate Type Insights

The Residential Real Estate market segmentation, based on type, includes Apartments, Condominiums, Landed Houses and Villas. The apartments segment dominated the market, accounting for the largest market revenue due to their inherent versatility and appeal to a wide demographic. The compact design of apartments makes them an efficient use of space in urban environments where land is often limited and expensive. Additionally, apartments often offer more affordable housing options compared to standalone houses, making them attractive to a diverse range of buyers and renters. The shared amenities, such as gyms, pools, and communal spaces, enhance the overall living experience, further contributing to their popularity. The rising trend of urbanization and the increasing demand for convenient, low-maintenance living spaces further solidify the dominance of apartments in the residential real estate market. The fastest-growing segment in the residential real estate market is currently Condominiums due to improved affordability.

Figure 1:  Residential Real Estate Market, by Type, 2022 & 2032 (USD Billion)

Source: The Secondary Research, Primary Research, MRFR Database and Analyst Review

Residential Real Estate Size Insights

The Residential Real Estate market segmentation, based on size, includes Less Than 50 Sq M, 51 to 80 Sq M, 81 to 110 Sq M, 111 to 200 Sq M and More Than 200 Sq M. The 81 to 110 Sq M category dominates the market due to its appeal to a broad spectrum of buyers. This size range strikes a balance between giving sufficient living space and maintaining affordability, making it attractive to first-time homebuyers and families alike. The versatility of this size range accommodates various lifestyle needs, offering flexibility for both single individuals and larger households. Additionally, developers often find this range efficient for optimizing land use and constructing housing projects that cater to a diverse demographic. The popularity of 81 to 110-square-meter residences reflects market demand for practical and adaptable living spaces in the residential real estate landscape.

Residential Real Estate Regional Insights

By region, the study gives market insights of North America, Europe, Asia-Pacific and the Rest of the World. The North American Residential Real Estate market area dominates this market, with a robust and diversified economy, high levels of urbanization, and a consistently growing population. The region's stability, strong institutional frameworks, and a well-established mortgage market contribute to a sustained demand for housing.

Further, the main countries studied in the market report are the US, Canada, Germany, France, the UK, Italy, Spain, Japan, China, India, Australia, South Korea, and Brazil.

Figure 2:  RESIDENTIAL REAL ESTATE MARKET SHARE BY REGION 2022 (USD Billion)

Source: The Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe's Residential Real Estate market accounts for the second-largest market share due to population growth, urbanization trends, and economic stability, which collectively contribute to sustained demand for housing across the continent. Further, the German Residential Real Estate market held the largest market revenue share, and the UK Residential Real Estate market was the fastest-growing market in the European region.

The Asia-Pacific Residential Real Estate Market is expected to rise at the fastest CAGR from the year 2023 to 2032. This is due to the rapid urbanization, population growth, and increasing disposable incomes. Moreover, China’s Residential Real Estate market held the largest market share, and the Indian Residential Real Estate market was the fastest-growing market in the Asia-Pacific region.

Residential Real Estate Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the Residential Real Estate market grow even more. Market parties are also undertaking various strategic activities in order to spread their footprint, with important market developments including mergers and acquisitions, higher investments, new product launches, contractual agreements, and collaboration with the other organizations. To spread and survive in the more competitive and rising market climate, the Residential Real Estate industry must offer cost-effective items.

Manufacturing locally to minimize the operational costs is one of the key business tactics used by the manufacturers in the Residential Real Estate industry to benefit the clients and grow the market sector. In recent years, the Residential Real Estate industry has offered some of the most significant advantages to the construction industry. Major players in the Residential Real Estate market, including Savills Plc, Arabtec Holding, Sun Hung Kai Properties Limited, Coldwell Banker Real Estate LLC, Raubex Group Limited, IJM Corporation Berhad, Hochtief Corporation, Sotheby's International Realty Affiliates LLC, Christie’s International Real Estate, Lennar Corporation, and others, are trying to raise the market demand by investing in the research and development operations.

Compass is a prominent real estate technology company that has made a significant impact on the real estate industry. Headquartered in New York City, Compass operates an integrated platform that combines technology, data, and a network of real estate professionals to simplify the home buying and selling process. Founded in 2012 by Ori Allon and Robert Reffkin, Compass utilizes a proprietary technology stack to provide real estate agents with tools for managing client relationships and marketing properties and accessing comprehensive market insights. In September 2023, real estate platform Compass announced an investment from SoftBank Vision Fund 2 to expand its technology and services. This partnership aims to leverage SoftBank's expertise in artificial intelligence and technology to further develop Compass's digital tools for real estate agents and consumers.

FirstPort is a prominent residential property management company based in the United Kingdom. Specializing in property services, FirstPort manages a diverse portfolio of residential properties, including apartment buildings, housing developments, and retirement communities. The company is known for its comprehensive property management solutions, encompassing services such as maintenance, financial management, and customer support for property owners and residents. FirstPort focuses on enhancing the quality of communal living spaces, ensuring the efficient operation of facilities, and promoting a positive living experience for residents. In September 2023, UK residential property services company FirstPort announced its acquisition by Emeria, the European leader in residential real estate services. This partnership combines FirstPort's expertise in property management with Emeria's broader European reach, creating a stronger player in the residential services market.

Key Companies in the Residential Real Estate market include

• Savills Plc


• Arabtec Holding


• Sun Hung Kai Properties Limited


• Coldwell Banker Real Estate LLC


• Raubex Group Limited


• IJM Corporation Berhad


• Hochtief Corporation


• Sotheby's International Realty Affiliates LLC


• Christie’s International Real Estate


• Lennar Corporation

Residential Real Estate Industry Developments

May 2023 KKR's European real estate platform acquired a portfolio of 30 residential properties. This acquisition marks KKR's first investment in the Nordic region through its European Core Plus Real Estate strategy and reflects its focus on the growing residential market in Europe.

January 2023 Blackstone completed its acquisition of Home Partners of America, a leading single-family rental (SFR) platform, for $6 billion. This acquisition significantly expands Blackstone's presence in the SFR market, which is expected to be a major growth driver in the US residential real estate sector.

December 2022 Independence Realty Trust acquired Steadfast Apartment REIT for $4 billion. This acquisition further consolidates the apartment REIT sector and creates a larger platform with a more diversified portfolio.

Residential Real Estate Market Segmentation

Residential Real Estate Type Outlook

• Apartments


• Condominiums


• Landed Houses


• Villas

Residential Real Estate Size Outlook

• Less Than 50 Sq M


• 51 to 80 Sq M


• 81 to 110 Sq M


• 111 to 200 Sq M


• More Than 200 Sq M

Residential Real Estate Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Australia
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America