PARIS, Aug. 16 (UPI) -- House prices could decline by 30 percent to 50 percent in most developed countries over the next 40 years, a persuasive new study by the Bank of International Settlements says.
The reason is the economics of an aging society, in which a higher proportion of older people live longer and thus have more non-working years of retirement in which they must live on their assets, like housing.
But there will be more and more older people trying to sell their houses into a market of fewer younger people, so prices are likely to drop.
The BIS is the international central bank for 53 of the world's biggest national and regional central banks. In its own mission statement it "fosters international monetary and financial cooperation and serves as a bank for central banks." It carries great weight and its surveys are to be taken seriously.
Its survey of prospects for the global housing market, titled "Aging and Asset Prices," written by Elod Takats, one of its in-house economists, represents the growing new field of studies into the ominous implications of the rise in human longevity.
The number of older people (age 65 and over) in the United States will double over the next 30 years, from 40 million to 80 million, and the percentage of older people in the population is going to jump from 13 percent to 20 percent. There are already more people over the age of 60 than children under 15.
By the time the youngest baby boomers turn 65 in 2029, every fifth American will be 65 or older. The percentage of 85-year-olds will grow even faster. 2029 is not far away, the time when one of this year's newborn babies will be going to college.
This isn't simply an American problem. In fact, thanks to relatively high birth rates and immigration the United States is getting off lightly. Take Britain, for example, where in 1980 a 65-year-old Englishman had a 1-in-1,000 chance of living to be 100 years old. Just 30 years later, this figure has increased to 1-in-100. And China is going to have one-third of its population over the age of 60 by the 2030s. UPI
