Residential Real Estate Leases - Worldwide

The Residential Real Estate Leases market market worldwide is projected to reach a revenue of US$5.34tn by 2024.
House Leases dominate the market with a projected market volume of US$3.06tn in 2024.
It is expected that the revenue will show an annual growth rate (CAGR 2024-2029) of 4.45%, resulting in a market volume of US$6.65tn by 2029.

Definition:

The residential real estate leases market refers to the market where landlords and tenants enter into agreements for the rental of residential properties, such as apartments, houses, and condominiums. The lease outlines the terms of the rental agreement, including the duration of the lease, the amount of rent to be paid, and the responsibilities of both the landlord and the tenant. The lease may also include provisions for security deposits, maintenance and repair obligations, and renewal options.

Structure:

The residential real estate leases market comprises the lease of houses and apartments.

Additional information:

The residential real estate leases market includes the following KPIs: the revenue generated by real estate leases, the number of real estate leases, the average revenue per real estate lease, the share of dwelling type of tenants, and the average room per tenant. The dwelling type shares comprise the shares of the renter population that lives in houses and apartments.

Residential house and apartment leases

Real estate transactions
Commercial real estate
Accommodation services, such as Airbnb

The Residential Real Estate Leases market in Worldwide is experiencing significant growth and development.

Customer preferences: Customers in the Residential Real Estate Leases market are increasingly looking for flexible and convenient living arrangements. They are seeking properties that offer amenities such as swimming pools, fitness centers, and communal spaces. Additionally, customers are placing a high value on properties that are located in desirable neighborhoods with easy access to transportation, shopping, and entertainment options.

Trends in the market: One key trend in the Residential Real Estate Leases market is the rise of co-living spaces. These are shared living arrangements where tenants have their own private bedrooms but share common areas such as kitchens and living rooms. Co-living spaces are becoming popular among young professionals and students who are looking for affordable housing options and a sense of community. This trend is particularly prevalent in urban areas where housing costs are high. Another trend in the market is the increasing demand for furnished rental properties. Many tenants are looking for fully furnished apartments or houses, as this eliminates the need to purchase and transport furniture. This trend is driven by the growing number of people who are relocating for work or education purposes and prefer the convenience of a furnished rental.

Local special circumstances: In countries with a high population density, such as Japan and Singapore, the Residential Real Estate Leases market is characterized by small living spaces. Due to limited land availability, apartments and houses are often compact and come with higher rental prices. In these markets, customers prioritize efficient use of space and proximity to transportation hubs. In contrast, in countries with a large land area such as the United States and Canada, the Residential Real Estate Leases market offers a wide range of property sizes and styles. Customers in these markets have more options to choose from and often prioritize factors such as the size of the property, the presence of a backyard, and the quality of the school district.

Underlying macroeconomic factors: The growth of the Residential Real Estate Leases market is influenced by several macroeconomic factors. Low interest rates and favorable lending conditions make it easier for individuals to obtain mortgages and invest in rental properties. Additionally, population growth and urbanization drive the demand for housing, especially in emerging markets. Economic stability and job growth also play a role in the Residential Real Estate Leases market, as individuals are more likely to rent or purchase properties when they feel confident about their financial situation. Overall, the Residential Real Estate Leases market in Worldwide is evolving to meet the changing preferences of customers. The rise of co-living spaces and the demand for furnished rentals reflect a desire for flexibility and convenience. Local special circumstances, such as population density and land availability, also shape the market dynamics in different countries. The underlying macroeconomic factors, including interest rates, population growth, and economic stability, contribute to the overall growth and development of the Residential Real Estate Leases market.

Data coverage:

Figures are based on total and average revenue of residential apartment leases.

Modeling approach:

Market size is determined by a bottom-up approach. We use national statistics, international organizations, and industry associations to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country specific industry associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market, for instance, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

Data is modeled using current exchange rates. The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

The global housing market has slowed amid high inflation and soaring borrowing costs. Homeownership is one of the most universal signs of success and prosperity: It serves both as a source of stable and secure housing and a long-term investment. After the global financial crisis, property prices rose in many countries and especially in advanced economies. For more than a decade after that, the housing market has been on an upward trajectory, culminating in the housing boom during the COVID-19 pandemic. However, housing shortages in highly competitive markets, the recent rapid house price growth, soaring inflation, and consequently, some of the highest mortgage interest rates recorded in the past 10 years have led to the market cooling.

Soaring inflation and aggressive mortgage interest rate hikes cooled the European housing market after a nearly decade-long period of growth. Since 2015, house prices in the European Union have grown by about 50 percent. When inflation in Europe started to rise at an alarming rate in 2021, the European Central Bank increased interest rates, resulting in substantially higher mortgage interest rates and a decline in homebuying. But how important is homeownership for Europeans?

Generally considered the third key pillar of the food, clothing, and shelter trinity popularized in India over generations, owning a home is still prioritized as a measure of financial security by a vast majority of the Indian population. The COVID-19 pandemic with its successive lockdowns and restrictions to stay within the confines of one’s home, further reinforced this vision. India’s growing urban population, rising household incomes, and decade-long low-interest rates have been propelling the demand for residential units, driving up the sales volume. Even though the residential real estate sector was severely hit in 2020, it marked a strong recovery in consecutive years, crossing pre-COVID sales figures.

Residential Real Estate Leases - Worldwide

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Methodology

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Residential Real Estate Leases - Worldwide

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Volume

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