Savills
538,097 followers
May 6, 2026
Despite wider economic instability, real estate remains attractive to investors. This month, I consider the role it plays in their portfolios. I also explore how demographic change is affecting economies around the world, with implications for property markets. Finally, I look at the major Asian cities with the greatest growth trajectories over the next decade.
Paul Tostevin
Head of Department, Director of World Research at Savills
4,410 followersFollow
Register for our upcoming webinar
Register to join our webinar on 4 June for our 2026 Impacts launch webinar, broadcast from the London Stock Exchange. I will be joined by Kelcie Elizabeth Sellers and Sarah Brooks to explore the dynamics having the greatest influence on global real estate.
The session will examine the investment, demographic, talent, logistics, development, AI and environmental trends shaping the sector’s future, offering practical insights for decision‑makers navigating a rapidly evolving landscape.
Why property remains attractive to investors
We’ve entered a new economic environment that’s marked by higher inflation, rebased interest rates and political fragmentation. Long-standing relationships between financial assets are changing. Bonds no longer behave as reliably ‘risk-free’ assets, while gold has taken on the character of a speculative trade.
So where does real estate fit in? As Oliver Salmon and Charlotte Rushton explain, the sector’s investment fundamentals continue to stack up:
- Diversification. Real estate retains its low correlation with equities, sitting in the sweet spot between fixed income and stocks on the risk-return spectrum.
- Safe-haven characteristics. Real estate is illiquid, concentrated and GDP-linked, but still meets many safe haven criteria: land is a scarce, tangible asset, and real estate has shown income resilience even during recessions.
- Attractive relative value. With equity valuations ratios stretched, the entry point for global real estate looks more compelling.
It is, therefore, unsurprising that institutional allocations to real estate have held steady at around 11% since the start of the decade. Offering a stable income and some protection from inflation, the ‘world’s oldest asset class’ is set to maintain its place in investor portfolios in the years to come.
India, China and demographic divergence
The world will face significant demographic change in the coming decades. Populations across many developed economies are ageing and in decline, leading to shrinking or stagnating workforces in some markets.
The trajectory of the world’s two most populous countries demonstrates the power of demographics, as Kelcie Elizabeth Sellers and Connor Chilton explain.
India’s working-age population is still growing. “India’s median age is around 28, with 67% of the population in the 15-64 age group,” says Savills India’s Arvind Nandan. The country is experiencing rapid urbanisation and rising consumption, and has harnessed its young workforce to become the leading provider of global capability centres.
In China, a demographic transition is underway, with 57% of cities forecast to shrink over the next decade. Ageing is concentrated in smaller cities as young people migrate to major hubs. This is driving demand for retrofitting and repositioning of existing buildings.
Even so, China’s economy is set to remain substantially larger than India’s in the coming decades, despite the latter’s higher forecast growth rate. And China is still home to some of the world’s fastest-expanding cities.
Where do you see the greatest future opportunities emerging from global demographic change? Let us know in the comments.
Asia’s growth hubs
The majority of the world’s fastest-growing cities in economic terms over the next decade will be in Asia Pacific. Indian and Vietnamese cities make up the top five in our new Savills Growth Hubs Index, fuelled by favourable demographics, expanding workforces and rising wealth.
“With a median age around 30 and a large portion of the population under 35, Southeast Asia’s growth hubs benefit from a powerful demographic tailwind,” says Chris Marriott, CEO of Savills South East Asia.
The implications for real estate are broad. Growth hubs will drive demand for workspace, retail and industrial and logistics property. They will also need plentiful, good-quality housing.
Paul Tostevin
Head of Department, Director of World Research at Savills
4,410 followersFollow
Paul Tostevin heads the Savills World Research team and is one of the lead directors of Impacts, Savills flagship global research programme. His work analyses how economic, environmental, demographic and technological trends influence real estate markets, today and in the years to come.
This newsletter is for general information only and should not be considered professional advice. Savills accepts no liability or responsibility for any direct, indirect or consequential loss arising from the use of, reference to or reliance on, this newsletter or its content.
