Asserting that, by 2016, 90% of the world’s population would live in emerging nations, independent political analyst Daniel Silke told the twelfth Investment Property Databank South Africa Property Investment Conference on Monday that property investors would be “missing a trick” if their attention had not yet shifted to the frontier economies of the world.

“This is where the action is going to be for the property industry, as these people are going to need bricks and mortar,” he commented.

Investment into the emerging markets would be driven by an expansion of the populations of those countries, juxtaposed against the ageing populations in developed economies.

“A key global trend is an expanding population on the one hand and an ageing population on the other. For example, by 2100, Nigeria is expected to have a population of 914-million, while, in Japan, adult diapers are currently outselling infant diapers,” he asserted.

Moreover, the analyst maintained that, by 2016, 75% of the globe’s total gross domestic product would originate in emerging markets, as China hovered on the cusp of becoming the world’s largest economy and the Brazil, Russia, India, China and South Africa (Brics) grouping increasingly offered an investment alternative to the traditional developed markets.

“The recently formed Brics development bank is symbolic of the emerging States offering alternative sources of funding and investment opportunities to the conventional stronghold markets of the West,” added Silke.

He further argued that the rise of the middle class in emerging markets offered property developers and investors “huge” opportunity, noting that “hundreds of millions” of people were moving out of the bottom-income category and into income brackets that gave them “some” disposable income.

“This will drive the development of huge, new cities, which is a core current trend of the global economy and which offers [property investors and developers] huge potential,” he noted.

This came as the world reached an “inflection point” where those living in urban areas had surpassed the number of people living in rural regions.

According to Silke, by 2025, 50% of Africans would live in urbanised areas and,
with this level of urban and population growth, African cities were destined to “mushroom”, making the need for residential development “critical”.

“In future, cities are going to be more and more important and will continue to offer opportunities in the property market. This is already evident in shifting investment trends, which demonstrate that the frontier of [property] investment returns are increasingly considered to be markets such as Ghana and Nigeria,” he said.

Silke cautioned, however, that any development in these emerging markets should be done in a careful, considered way to avoid urban densification.