By Andrei Skvarsky.
The economies of emerging market countries are largely driven by their rapidly growing middle classes, whose relative and increasing affluence boosts demand and hence spurs production and job creation, says online real estate trader Lamudi.
Ernst & Young expects the Asia-Pacific region to be home to two thirds of the global middle class by 2030, Lamudi, which focuses on emerging and frontier markets, said in a statement.
Latin America’s middle classes have grown by 63 million over the last decade, the Berlin-headquartered dot-com company cited Washington-based think tank Pew Research Center as saying.
The middle class of Nigeria swelled sevenfold between 2000 and 2014, and that of Indonesia is expected to more than double in the next five years, Lamudi said.
Indonesia shows Asia’s fastest pace of middle class growth. The country’s growing middle class is flocking into Jakarta, raising demand for residential and commercial properties, high-tech products, reliable Internet connectivity and online services, the property company said.
Economic improvements as a result of middle class growth are also expected to lead to higher standards of education and healthcare, and to eventually serve to raise the average quality of life in emerging market countries, Lamudi said.
It said the middle classes in the emerging markets are much younger than their counterparts in developed countries.
A survey by Lamudi, a two-year-old company which does business in 34 countries in Asia, the Middle East, Africa and Latin America with more than 900,000 real estate listings across its global network, revealed that, in the first five months of 2015, 60.3% of house hunters in Pakistan using its platform were aged between 18 and 34, and that in Nigeria the same age group made up 49.4% of house hunters using the firm’s services.
“The shifting demographics within the emerging markets are very important, particularly when you look at the growing middle class in regions like Asia,” said Paul Philipp Hermann, co-founder and managing director of Lamudi.
“As people become more affluent, they also become better educated, more career-minded and therefore they have more purchasing power as they enter the property market. They buy houses earlier and more often, leading to increasing turnover and search volume. The importance of this trend cannot be underestimated, as it continues to support strong growth in the country’s property market.”
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