Silver cities - Planning for an ageing population

The world is ageing, particularly in advanced economies. Over the next 30 years, we will see an extra 15,000 people reaching retirement age in the Organisation of Economic Cooperation and Development (OECD) member countries every single day.

5th March 2018

The world is ageing, particularly in advanced economies. Over the next 30 years, we will see an extra 15,000 people reaching retirement age in the Organisation of Economic Cooperation and Development (OECD) member countries every single day.

By 2045 the proportion of the population aged over 65 will rise to 25%, from the current 16%. This equates to 146m more old people than there are today – totalling 1.4bn globally.

At the same time, the younger population is steadily shrinking. In 2015, the young (those under 20 years old) counted for 24% of the population, a proportion which is expected to decrease to 21% by 2045.

This demographic shift is set to have a profound impact on society and the social fabric of cities. By 2030 all major urban centres in the OECD will see a sharp increase in the number of elderly. These cities will need to adapt and develop a number of short and longer-term strategies to ensure they respond adequately to both the challenges and opportunities that an ageing population present.

For the first time in history, the elderly will be the largest age group by 2045, with the greatest increase occurring in those aged over 75 years.


There are some significant implications of an ageing population; political, economic and on all sectors of real estate. Demographic change will have profound implications for the economy and economic growth is expected to slow permanently across most major economies. In turn, this will have a significant political impact. Specifically:

Stagnation of living standards. Rising living standards can only be sustained by higher productivity growth and unfortunately productivity is negatively correlated with ageing.


Low global interest rates. The rise in the number of older workers accumulating savings ahead of retirement has seen global savings swell, pushing real interest rates lower. At the same time, ageing populations have also contributed to the trend decline in investment, further depressing global interest rates.

Slow house price growth. Whilst the elderly sell at least part of their accumulated wealth once they enter retirement, they tend to retain their housing assets for much longer than other forms of wealth. Instead, there is an expected increase in demand for equity-release products.

Ageing will be negative for public debt. An ageing population will create significant fiscal stress for governments in OECD economies, as a result of rising health and pension costs.


Difficult political decisions will be needed to pay for ageing. Governments have to confront difficult decisions about who pays for ageing; either younger workers will be forced to carry a greater tax burden, or the elderly will need to fund a greater share of their own retirement costs.

Politics is becoming fractured along generational lines. The elderly are more politically engaged than younger generations and the evidence suggests that they increasingly have divergent fiscal priorities to younger generations.


Looking more closely at the implications for real estate, there will be both challenges and opportunities. In relation to the retail sector, the swelling number of retirees, combined with strong income and wealth levels, means the elderly consumer market is set to grow rapidly over the next 30 years. Because most elderly are homeowners when they retire, their discretionary spending on non-housing consumer items is sustained well into retirement. 

The expected growth in the elderly consumption market over the next 15 years presents a compelling opportunity for retailers who understand the elderly consumer. However, like other consumers, elderly buyers are also increasingly buying online.  Industrial as well as retail stand to benefit from increased elderly online shopping. 

Additionally, by the start of the next decade there will be more older workers aged over 60 still in the workforce than young workers aged under-25. Older workers have different needs to younger workers and office design will need to adapt for their different spatial requirements in areas such as lighting, acoustics and ergonomics.

However, it’s the residential sector where the impact is perhaps most profound:

  • Elderly households will become a significant proportion of the residential market. By 2030, as many as a third of households in many OECD countries will include an elderly person. More than half of old-aged households will include someone aged over 75.
  • There will be a sharp rise in lone pensioner households. Already, one in five elderly people in the OECD live alone and this is usually a lone female household.
  • There is still little evidence of the elderly actively downsizing. The elderly tend to “age in place”, in locations where they have long-term community attachments. In England, only 2% of households aged over 65 have moved in the past seven years.
  • Existing housing stock will need to be adapted. There is also likely to be significant opportunity in retrofitting existing houses to allow the elderly to live independently for longer.
  • There is an untapped potential market for quality age-friendly housing. There is a fundamental mismatch between the large, under-occupied houses that the elderly currently own and the mid-sized, accessible housing they actually need. There is clearly an untapped market opportunity to build the right product to unlock the potential downsizing (or “right-sizing”) by the elderly into purpose built dwellings that are better designed for their life-time needs and located in the communities where they have existing attachments.


It is therefore clear that an ageing population is going to change cities.

By 2030 there will be a high proportion of elderly in over 30% of the OECD’s top 100 largest cities including Tokyo, Berlin, Milan, Madrid and Lisbon and cities must adapt to accommodate them.

One area where ageing will have an impact is on what exactly is the right level of density in our cities. Policies to achieve greater density often boil down to attempts by developers to build ever-smaller-sized apartments, which are unlikely to be suitable for the changing physical needs of older residents. However, increasing density must be balanced with age-friendly design principles to make downsizing more attractive for the elderly, possibly through incentives in the planning system.

Cities should also incorporate age-friendly principles to make the urban environment more appealing and suitable for older people. There is a growing need to make cities more accessible and responsive to the changing needs of the elderly. For example, many cities’ public transit networks are not fully accessible to the mobility impaired.

There is not a silver bullet solution to what is a serious challenge and a defining one for generations to come. Our research looks at the ageing issue from a city perspective, providing a snapshot of how the implications of an ageing population are being addressed, if at all, within four very different global cities – Hong Kong, London, Madrid and Vancouver. We hope that it will encourage discussion and debate across the wider property industry, involving and encouraging central and local authorities and other relevant stakeholders to work together in recognising the issue and prioritising its resolution. We stand to play our part in shaping the future development of cities in a way that improves their resilience to the ageing challenge.

You can read the city case studies and the full research report here.

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