2018 Global

Overview of
Homes
PAVEL MARCEUX
Not to be distributed without permission.
2018 Global Overview of
Homes

Pavel Marceux
Households Specialist

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© 2018 Euromonitor International

 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).
This 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 this report include households by location,
possession of household durables, household size, dwelling type, homes by tenure,
homes by construction year and house completions.

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 INTRODUCTION

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.

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i nt ro d uc t i o n

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.

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 GLOBAL OUTLOOK

A more urbanised world

Urbanisation will continue apace through 2030, with the year posting a record total
in terms of households and people present
in urban areas. Rural households are not
contracting, but urban hubs are expanding at a
much faster pace. Factors such as immigration
5.0 billion
people will be living in 1.7
from poverty-stricken areas, city expansion to billion urban households.
incorporate more suburban and rural zones
and the creation of entirely new towns and
cities, will drive urbanisation further. By 2030 some 5.0 billion people will be living in
1.7 billion urban households.

Apartmentalisation as a consequence of
urbanisation
The onset of urbanisation is creating a boom in apartments. Countries such as China,
Brazil and the UK will see surging growth in apartments through 2030. However,
houses will remain the predominant household structure globally, outnumbering
apartments two to one.

Apartments are seeing faster growth because they can be made much smaller and
cheaper and provide a solution for housing large numbers of people in a limited urban
space. Apartments are also in high demand among the urban, singleton consumer; they
provide much easier access to utilities and digital services, requiring fewer skills from a
homeowner to look after their property.

Households by year of construction

The accelerated development of new housing units in emerging markets like India and
China will rapidly drive the total of housing stock built after 2020. Houses built after

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g lo ba l o ut lo o k

2030 will only lag behind houses developed before 1979. This housing construction
boom offers significant opportunities for developers, furniture brands and appliance
manufacturers, as well as companies involved in general household goods and services.

Households by rooms
Globally, all household sizes will increase, but households with four rooms will see the
largest rise over the 2017–2030 period. This size of household is aspirational enough
to attract large demand and is sufficiently affordable that home-seekers can plan to
purchase. The four-room household is also versatile and can be both an apartment and
a house. The smallest gain will be among two-room homes, as this size falls in-between
demand among singletons looking for one-room housing and couples and families that
want three rooms and more.

Households by tenure
Urbanisation will drive demand for home finance, as mortgage markets mature and
banks provide more attractive rates to homebuyers. The world will see surging growth
rates in mortgaged households, with over 100 million newly mortgaged homes to be
added over 2017–2030 globally.

Expanding cities are also driving rental markets, as a large number of newly-urbanised
citizens cannot afford to purchase a home outright. Online platforms are also making
the rental process smoother.

Household durables
Basic appliances such as TV sets and cookers will remain the most common possession
among households globally by 2030. The largest jumps in penetration over the review
period will be seen in so-called luxury durables, like video game consoles, video
cameras and freezers. Middle-class expansion in developing countries will drive
demand for these products, as rising incomes enable households to purchase added
extras they might not have afforded otherwise. Falling prices for many durables is
another factor.

Homes as digital consumption units

The rapid globalisation of internet access and associated services is digitalising
households at an unprecedented rate. By 2030, the majority of the world’s homes will
have broadband internet, unlocking access to services including online video, gaming,
gambling, social media, e-commerce, banking, e-health and e-education, among others.
This higher level of connectivity, with the help of devices like smartphones, tablets and
smart TVs, will enable home trends that will transform consumption behaviour

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 KEY TRENDS

Households are upgrading their product

portfolio
Premiumisation, the bridge brands
have created between the desirability
of the luxury world and the function Premiumisation
the bridge brands have created between the
and necessity of the mass market, is
encouraging homes to spend more desirability of the luxury world and the function
money on household goods like and necessity of the mass market
appliances.

Fashion brands developing appliances for the kitchen or the popularity of multi-use
products like juicers and microwaves are some examples of this. Premiumisation
has also been evident in the development of appliances and furniture for specific
household classes, such as smaller, single-serving appliances for single-person
households.

Urbanisation is creating new clusters of

household consumption
Emerging markets are being reshaped, as newly-urbanised households gain access
for the first time to a variety of retail and commercial services available in cities.
Developed markets are more stagnant in urban growth, making the trend less
pronounced.

For example, China is witnessing an unprecedented speed of city development.

The country will see more than 100 million new urban households over 2017–2030.
Household goods store Ikea has taken advantage of the rapidly-urbanising middle
class in China, the biggest market in the Asia Pacific region, to provide flatpack
furniture in cities.

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k e y t re n d s

Smaller homes in urban hubs, larger

homes in most economies
Households globally are undergoing spatial evolution, but with contrasting trends
depending on location and level of economic development. Homes in hyper-urban
hubs like London, New York and Tokyo are falling in size due to the expense of
real estate and greater demand among singletons for small housing. In emerging
markets, households are growing substantially due to increasing incomes and better
living standards.

Mainstream companies are making a move into smart

homes

• DirectTV: The US cable company offers a remote smart service

that allows users to tap into their smartphone to control their cable
content, such as recording programmes.

• Control4: One of the largest smart home providers, Control4 had a

multi-billion-dollar IPO in 2013. It offers a full smart-home system that
can be controlled by an app.

• Hue Philips: Hue is a smart LED lights product range from Philips.
The lights collect data on energy usage in the home and can be
controlled remotely via the smartphone.

• ADT Pulse: The traditional security systems company ADT has made
in-roads into the smart market via its Pulse service, which offers
homeowners security connectivity and visibility via the app.

• Nest: Smart devices company Nest Labs was purchased by Google

for US$3.2 billion in 2014. The firm produces smart thermostats and
smoke alarms, all compatible with smartphones.

• Wemo: Electronics specialist Belkin offers a range of smart plug-ins

called Wemo. Home devices are connected to these plug-ins, which
allow the collection of data and remote control via an app.

Megacity households demand access to

more amenities
In the 1970s, there were less than 10 megacities (cities with a population over 10.0
million) worldwide. In 2016, Euromonitor International recognised 30, with more

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 k e y t re nds

than 40 expected by 2030. Factors such as immigration from poverty-stricken areas,

cities expanding to incorporate more suburban and rural zones and the creation of
entirely new cities will drive the growth of megacities.

In new megacities, such as China’s Wuhan or India’s Kolkata, households are

evolving their consumption behaviour as they undergo rising standards of living.
New investment has fuelled a mall construction boom in megacities across Asia,
Eastern Europe and Latin America. Aside from early-mover fast-food outlets, such as
McDonald’s, demand for higher-end grocery stores and niche outlets, such as sushi
bars, is on the rise.

Facilities expansion generates

an audience for home goods and
appliances
A major focus on infrastructural development by emerging markets is enhancing
household connectivity to facilities like electricity and water in these countries. This
is a major driver of growing appliances uptake in the developing world, in particular
appliances for bathrooms (showers, sinks, taps and so on) and kitchens (refrigerators,
microwaves, washing machines, cookers, etc.).

Millennials shaping rentals and retro

demand
Unlike their parents, millennials are much more flexible in how they view property. By
delaying traditional life milestones that precede homeownership, such as education,
marriage and kids, millennials are renting longer. They are happy to rent well into their
late thirties or live with their family until they have the resources to comfortably live
by themselves (part of the “boomerang
kids” trend). In Western Europe, a market
where millennials represent a major
Boomerang
segment of the consumer pie, the number
of rented households has increased 2.0
million over 2011–2016.
Generation
young people have been forced to
return to their parents’ homes due to
Yet, while many see rent as a way of high house prices, poor wages and
putting off the major outlay needed to the burden of student debt
buy a home, millennials are quite happy
to be less cost-conscious when it comes to functional and trendy household goods for
their rental space. Boutique bins, mirrors and chairs are items that can be significant
expenditure points, while millennials are willing to pay a premium for space-friendly
goods like foldable bicycles.

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k e y t re n d s

Millennials have had a considerable influence on bringing back retro durables into the
mainstream. A mixture of nostalgia, curiosity and fashion has led to a resurgence in
retro-cool electronics. Consumer electronics firm Nintendo was able to tap into this
by releasing retro video game console Nintendo Classic Edition. In 2017, Sony began
selling a portable CD radio-cassette player, while Hitachi Maxell replicated the design
of one of its throwback cassettes popular in the 1970s. Brands that are able to play on
this sentimentality can significantly enhance their status among Millennial consumers.

Access to home finances enables more

homeowners
The world is currently undergoing what may only be described as “mortgage mania”,
as decreasing interest rates and better regulated financial systems are enabling more
home-seekers to leverage home finance services to purchase a home successfully.
On the one hand, standards of living have been rising as homeowners are feeling an
increased sense of security as compared to those who rent. On the other, a segment of
the population is developing that have long-term indebted homes which could feel the
pressure if a market experiences a sharp economic downturn.

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 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.

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 ABOUT THE AUTHOR

PAVEL MARCEUX
Households Specialist
Euromonitor International
Twitter | Connect on Linkedin

Using expertise built up across a variety of consumer segments, including digital

services, appliances and sustainability, Pavel guides the Households page to
analyze the latest trends and opportunities in the home space. From smart home
tech to family demographics and dwelling types, Pavel brings to life the issues
that impact brands and governments worldwide.

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