The real estate industry will see a surge in demand to accommodate growth in Southeast Asia’s population, especially when the Asean economic integration creates new jobs, global real estate consultancy firm Jones Lang Lasalle (JLL) said.
“More people means more real estate,” said Chris Fossick, Jones Lang Lasalle managing director for Southeast Asia, at the Asia CEO Forum held at the Tower Club in Makati City on Tuesday.
Fossick explained that the Asean Economic Community aims to generate a significant number of new jobs, which will also create demand for new real estate by companies that generate these jobs.
“The estimate is that it will produce 14 million new jobs in the manufacturing and service sectors. And those extra jobs will be needed to be placed in some sort of real estate—whether it’s an industrial building, whether it’s a hotel, an office building, retail, or BPO,” said Fossick.
Besides the growth in the number of jobs, the increase in population will also have its impact on the real estate sector.
Fossick noted that from the current 624 million, population in the Asean region is expected to increase to 665 million in the next five years.
He said that an “increase in population means also an increase in housing formation.”
Increased demand for more real estate driven by the growth in population is good for the industry, he said.
“It’s very positive for the real estate market and certainly one of the drivers of real estate is population growth,” said Fossick.
He also highlighted that the Asean region has one of the youngest populations in the world and this would also add to the increase in housing formation since the younger generation are more independent and want to own properties of their own compared to the previous generations.
“Young people today are different. They want to get into the property market. They want their independence. They want their own homes,” said Fossick.
He added: “We’re going to see a lot of changes and those changes are going to be more pronounced here in Southeast Asia more than any part of the world because of this young population.”