Vikram Malhotra, managing director, real estate equities and research at Mizuho, joined the latest episode of the Nareit REIT Report podcast to share some of the findings from recent Mizuho research into the economic and investment implications likely to result from an aging population.
Malhotra noted that the 75-plus cohort in the United States is set to grow at about 4% per annum over the next five to 10 years. By 2030, the group will represent 10% of the total population, up from 7.5% today. At the same time, their spending is expected to grow over 80%, or $700 billion, through 2030.
“When you marry the population growth with the spending, what we find is that the senior consumer is going to become a much more relevant piece of the equation,” Malhotra said.
One of the real estate sectors likely to benefit from the so-called Silver Tsunami is senior housing, Malhotra explained. The continued downward trend in the number of individuals caring for elderly parents means that the number of seniors opting to move into senior housing will increase, he said.
During the interview, Malhotra also discussed how REITs are positioned to respond to increased demand for senior housing, how other real estate sectors are likely to feel the impact of an aging demographic, the potential effect on real estate and real estate investing of an approaching wealth transfer from older to younger generations, and more.