Global Living Investment Universe 2025

• Living investment is concentrated and growing. Living is the largest sector globally and is forecast to retain the number one spot with a further $1.4 trillion in transactions over the next five years. The Living 15, the largest investment markets, contributed 98% of living investment and 32% of global commercial real estate investment over the last five years, with investment rising 19% from the previous five years.
• Global capital seeks diversity. Cross-border investment has been instrumental in establishing new markets. These purchases accounted for a quarter of living investment over the past five years. This will rise as international buyers are attracted to new locations, various sub-sectors and opportunities for large platform purchases.
• Supply shortages underpin values. Large investors own just 9% of housing across the Living 15 key markets. Over the next five years this living universe is expected to exceed 50 million homes. Investors will strengthen overall supply, but will need to overcome challenges of high construction costs and regulation.
• Urbanization and international mobility drive demand. Trends of urbanization, international mobility and shrinking households mean growing demand for quality rental. The Living 15 key markets will need an extra 21.8 million urban homes within the next decade, investor supply would need to more than double to meet this demand.
• Location, location, location. Successful growth strategies start at the neighborhood level and use strategic place-making to attract tenants and deliver value. Population density, average commute time and proximity to local amenities, have the larger impact on investor returns.

Renting is growing in popularity across the globe, with the number of rental households rising 10% over the past decade. Still a very small proportion of rental homes are owned by large investors. In the Living 15, investor-owned supply accounts for 9% of households or 24% of rental households. The level of institutionalization varies from more mature markets like the U.S. and Canada (48% of rental), through to emerging markets , such as Australia and Italy, where investors own under 1% of rental households.

For all countries in the Living 15 to reach the level of market maturity of the U.S. and Canada, the amount of investor-owned stock would need to double, with an additional 31.2 million homes. If each market were to rise to the U.S. level of annual investment per capita (average in 2020-24), this would double investment volumes.

While investment is gaining pace, a doubling of activity is unlikely in the short term. Transactions reached the highest level on record in 2021, but slowed in 2022 and 2023. Over the next five years total global living investment is expected to match the last five years of elevated volumes, at $1.4 trillion, 14% higher than the 2015-19 level. The largest five-year increases will be in Germany, the UK and Australia.

U.S. investors are the biggest force behind living, contributing two-thirds of capital deployed in the Living 15 over the past five years. While the vast majority of this was via domestic transactions, 11% went to other locations: primarily the UK, Germany and Spain.

Cross-border investment has been instrumental in establishing new markets. These purchases accounted for a quarter of living investment over the past five years, though are far higher in smaller and less mature markets, peaking at 87% in Ireland and 82% in Australia, both English-speaking countries with low shares of investor stock.

With capital raising now resuming and yields stable or compressing, larger deals are expected to follow. Platforms owners who held off on large sales can be more confident on pricing and appetite. Multi-market platforms with operators in place will offer diversified portfolios in countries which may be otherwise difficult to access, particularly in Europe. As living gains appeal with investors seeking to raise exposure, this will further expand the pool of prospective buyers

Housing shortfalls versus strong underlying rental demand has been a key driver for investors in the living sector over the past decade. A majority of the world’s largest living markets continue to face housing supply challenges despite strong historic economic growth.

Nine of the Living 15 markets have set national new homes targets in a bid to increase supply to meet demand. However, all nine of those countries failed to meet their target in 2024, with most building at a rate of around 60-75% of target.

Institutional scale investors have played a significant role in easing supply pressures over the past decade. A total of 6.5 million new purpose-built rental units have been delivered in the Living 15 between 2014 and 2024.

Construction challenges will continue to inhibit housing supply in the coming years, although as cost inflation slows and debt pricing normalises, this should ease. Investors’ ability to innovate, be that through repurposing other use classes or using modern methods of construction, will mean not just more homes delivered in the next decade, but better quality housing also.

As global populations grow and change, the need for adapted, flexible living spaces offers an opportunity for investors. New demand for housing will be focused in cities. Urban populations in the Living 15 are forecasted to account for 85% of the total in 2035, compared with 83% in 2025 and 82% 2015. This intensifying demand reflects a shift in employment to the service economy, with people from rural locations and other countries seeking higher wages and local amenities in urban locations.

Urban population growth in the Living 15 will be driven by high levels of international migration. Living investors are well-positioned to address this new housing need. This is most obvious in the growth of the purpose-built student accommodation (PBSA) sector, which has risen in response to the growing influx of international students.

The average household size is shrinking, with more single households, lower birth rates and longer lifespans. As a result, between 2025 and 2035 national household growth is expected to double the rate of population growth in Living 15. Urban demand will exceed this, with rural populations in decline. Over the next decade, cities within the Living 15 will need 21.8 million homes to cater to additional small urban households.

The future of global living investment markets relies on more than strong city demand and international capital flows. Successful growth strategies start at the neighborhood level and use strategic place-making to attract tenants, create communities and deliver value.

Population density, average commute time and proximity to local amenities, such as rail transit, restaurants, grocery stores and parks all impact tenant appeal and rent levels. Ultimately, the importance of intentional place-making will remain paramount to developers and investors creating new communities. Elevated construction costs and development equity hurdles require building well-positioned assets in desirable neighborhoods to achieve the returns necessary for long-term investment in the living sector.

Investors will continue to innovate, harnessing repurposing strategies, public-private partnerships and technology to support operational efficiencies and sustainable development. JLL predicts investor total rental stock holding will exceed 50 million by 2030, providing a home to circa 10% of households in the world’s largest living markets.