Global Opportunities in Rental Housing

In our view, rental housing represents an attractive investment opportunity in developed markets around the world. In general, homebuilding has failed to keep pace with population growth in many major cities.^[1] Resurgent migration since the pandemic, fueled in part by geopolitical tensions, has intensified housing shortages in countries including the U.S., Australia, Germany, the UK, and Spain.^[2] Home prices across the Organization for Economic Cooperation and Development (OECD) group of advanced economies have soared 50% over the past five years, lifting price/income ratios to near record highs, even as mortgage rates have spiked (see Exhibit).^[3] The cost of renting has also increased, but only half as much (24%), and less than incomes (36%), creating a runway for further growth as the more affordable housing option for expanding populations.^[4]

Exhibit: OECD Home Price /Income Index

Sources: OECD and DWS. As of March 2024.

In the U.S. and Europe, we favor suburban, often lower-density housing (e.g., townhomes and single-family rentals) catering to an expanding cohort of young Millennial-led families, many of whom now have greater flexibility to work at least part of the week from home. We also believe that high-quality student housing is undersupplied at many leading universities and provides welcome downside protection through economic cycles. In Asia, we believe that Australian build-to-rent represents a timely opportunity, supported by strong population growth, relatively affordable rents, and recently enacted tax concessions.

Additional Resources

Industrial market fundamentals have rebalanced with limited pain to landlords

A soft-landing economic cycle has enabled industrial market conditions to stabilize into what appears to be a modest recovery phase.

Embracing the New Normal in the U.S. Office Sector

The office sector is going through a period of change intensified by COVID-19 lockdowns.

Self-Storage: After Pause, Opportunities Begin to Emerge

Going forward, we expect a recovery in self-storage fundamentals over the medium term due to a combination of demand and supply related factors.

^1. JLL, PMA, and CBRE-EA. As of June 2024.

^2. JLL, PMA, and U.S. Census Bureau. As of June 2024.

^3. OECD. As of March 2024.

^4. OECD. As of March 2024.

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