Important security note: Warning of attempted fraud in the name of DWS
We have detected that fraudulent individuals are misusing the "DWS" trademark and the names of DWS employees on the internet and social media. These fraudsters are operating fake websites, Facebook pages, and WhatsApp groups. Please be aware that DWS does not have any Facebook Ambassador profiles or WhatsApp chats. If you receive any unexpected calls, messages, or emails claiming to be from DWS, exercise caution and do not make any payments or disclose personal information. We encourage you to report any suspicious activity to info@dws.com, including any relevant documents and the original fraudulent email. Additionally, if you believe you have been a victim of fraud, please notify your local authorities and take steps to protect yourself.
12/11/2024
Simon Wallace
Global Co-Head of Real Estate Research
Martin Lippmann
Head of Real Estate Research, Europe
Throughout human history, “housing” has been a basic need, irreplaceable by other means. Industrialization and mass urbanization forever changed the way people lived. Growing populations, supply-demand imbalances, rising costs, the question of housing and housing affordability has, since this point, rarely been out of the public consciousness. Often viewed from a national perspective, these concerns repeat across the globe.
Drawing comparisons between cities is difficult, and unlikely to provide comfort to those struggling with the cost of housing. But for real estate investors it is an important question, providing insight into both the risks and the opportunities across different residential markets.
There is no one definition of housing affordability, but in this analysis, we look at it from a rental perspective, as opposed to the cost of ownership and the servicing of a mortgage.
While owner occupation is the prevalent form of housing globally, rental accommodation is gaining traction in many markets, accounting for an increasingly large share of institutional real estate investment portfolios.
Post Global Financial Crisis (GFC), reduced access to financing as well as an increased desire for flexibility have driven more people towards rental accommodation. Exacerbated in recent years by rising interest rates and a reduction in available rental accommodation, rental pressures have continued to mount, further elevating affordability concerns.
Sharply rising rents may benefit owners in the short-term, but over a sustained period a market that has become unaffordable could be at risk of increased income volatility – with tenants less able to absorb personal and economic shocks – as well as government intervention – increasingly common over recent years.
Given the growing prevalence of rental accommodation within institutional portfolios, alongside the event challenges in rental affordability that have emerged since the GFC, our analysis has focused on rental accommodation, comparing measures of affordability across major global cities. To monitor the progression of global affordability, we will look to revisit this analysis on an annual basis.
Housing affordability is a difficult indicator to measure, as it depends on many aspects across a multitude of individual households.
Cost-of-living measures are broad in their definition [1] while overburden rates often do not distinguish between type of occupation, including rental and owner occupier households and including all payments associated with housing.[2]
In this analysis we have used two measures. The first of which, a rental affordability ratio, refers to tenants alone and is defined as the proportion of median household income after tax spent on net rent, with a ratio of 30% often seen as the maximum threshold for affordability.[3]
The second approach considers residual spending power, measured as the dollar value of household disposable income after rental payments, stated as purchasing power parity (PPP).[4]
E.g. Numbeo, 2024
Eurostat, 2024
E.g. Affordable Housing Commission, 2019, US Department for Housing and Urban Development, 2017
See section 4. Data Definition & Methodology for further reference on indicators and measures used
The brand DWS represents DWS Group GmbH & Co. KGaA and any of its subsidiaries, such as DWS Distributors, Inc., which offers investment products, or DWS Investment Management Americas, Inc. and RREEF America L.L.C., which offer advisory services. There may be references in this document which do not yet reflect the DWS Brand.
Please note certain information in this presentation constitutes forward-looking statements. Due to various risks, uncertainties and assumptions made in our analysis, actual events or results or the actual performance of the markets covered by this presentation report may differ materially from those described. The information herein reflects our current views only, is subject to change, and is not intended to be promissory or relied upon by the reader. There can be no certainty that events will turn out as we have opined herein.
Marketing Material. In EMEA for Professional Clients (MiFID Directive 2014/65/EU Annex II) only; no distribution to private/retail customers. In Switzerland for Qualified Investors (art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA)). In APAC and LATAM, for institutional investors only. In Australia and New Zealand for Wholesale Investors only.
In North America, for institutional use and registered representative use only. Not for public viewing or distribution. In Israel for Qualified Clients (Israeli Regulation of Investment Advice, Investment Marketing and Portfolio Management Law 5755-1995). For investors in Bermuda: This is not an offering of securities or interests in any product. Such securities may be offered or sold in Bermuda only in compliance with the provisions of the Investment Business Act of 2003 of Bermuda which regulates the sale of securities in Bermuda.
Important information:
For EMEA, APAC, LATAM & MENA:
DWS is the brand name of DWS Group GmbH & Co. KGaA and its subsidiaries under which they do business. The DWS legal entities offering products or services are specified in the relevant documentation. DWS, through DWS Group GmbH & Co. KGaA, its affiliated companies and its officers and employees (collectively “DWS”) are communicating this document in good faith and on the following basis.
This document is for information/discussion purposes only and does not constitute an offer, recommendation, or solicitation to conclude a transaction and should not be treated as investment advice.
This document is intended to be a marketing communication, not a financial analysis. Accordingly, it may not comply with legal obligations requiring the impartiality of financial analysis or prohibiting trading prior to the publication of a financial analysis.
This document contains forward looking statements. Forward looking statements include, but are not limited to assumptions, estimates, projections, opinions, models, and hypothetical performance analysis. No representation or warranty is made by DWS as to the reasonableness or completeness of such forward looking statements. Past performance is no guarantee of future results.
The information contained in this document is obtained from sources believed to be reliable. DWS does not guarantee the accuracy, completeness, or fairness of such information. All third-party data is copyrighted by and proprietary to the provider. DWS has no obligation to update, modify or amend this document or to otherwise notify the recipient in the event that any matter stated herein, or any opinion, projection, forecast, or estimate set forth herein, changes or subsequently becomes inaccurate.
Investments are subject to various risks. Detailed information on risks is contained in the relevant offering documents.
No liability for any error or omission is accepted by DWS. Opinions and estimates may be changed without notice and involve a number of assumptions which may not prove valid.
DWS does not give taxation or legal advice.
This document may not be reproduced or circulated without DWS’s written authority.
This document is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country, or other jurisdiction, including the United States, where such distribution, publication, availability, or use would be contrary to law or regulation or which would subject DWS to any registration or licensing requirement within such jurisdiction not currently met within such jurisdiction. Persons into whose possession this document may come are required to inform themselves of, and to observe, such restrictions.
© 2024 DWS International GmbH
Issued in the UK by DWS Investments UK Limited which is authorised and regulated by the Financial Conduct Authority (Reference number 429806).
© 2024 DWS Investments UK Limited
In Hong Kong, this document is issued by DWS Investments Hong Kong Limited and the content of this document has not been reviewed by the Securities and Futures Commission.
© 2024 DWS Investments Hong Kong Limited
In Singapore, this document is issued by DWS Investments Singapore Limited and the content of this document has not been reviewed by the Monetary Authority of Singapore.
© 2024 DWS Investments Singapore Limited
In Australia, this document is issued by DWS Investments Australia Limited (ABN: 52 074 599 401) (AFSL 499640) and the content of this document has not been reviewed by the Australian Securities Investment Commission.
© 2024 DWS Investments Australia Limited
For investors in Bermuda: This is not an offering of securities or interests in any product. Such securities may be offered or sold in Bermuda only in compliance with the provisions of the Investment Business Act of 2003 of Bermuda which regulates the sale of securities in Bermuda. Additionally, non-Bermudian persons (including companies) may not carry on or engage in any trade or business in Bermuda unless such persons are permitted to do so under applicable Bermuda legislation.
For investors in Taiwan: This document is distributed to professional investors only and not others. Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security. The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed, and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction, or transmission of the contents, irrespective of the form, is not permitted.
Financial Professional
Individual Investor
Institutional Investor
The content of this website (the “Website”) is intended exclusively for persons who are resident in United Kingdom or who access this website from United Kingdom.
U.S. Persons are not eligible to invest in shares of such investment funds which are stated on the following websites. By clicking on “I accept”, I confirm that I am not a citizen of the United States, that neither my place of residence nor place of business is in the United States and especially I am not a person that is a “U.S. Person” as such term is defined under Regulation S of the U.S. Securities Act of 1933.
The use of this Website is subject to (i) the laws of England and Wales and (ii) the Terms of Use of this Website. Please read the Terms of Use carefully.
By entering this Website, you agree to accept the Terms of Use of this Website.
We use cookies and similar technologies that are essential to operate our websites. With your consent, we will use cookies for performance analysis of our websites. This enables us to detect and fix errors and usability issues as soon as possible and to constantly improve our website. Furthermore we use marketing cookies to measure the success of our marketing measures and personalize our contents to your needs as precisely as possible, potentially also outside of our websites. In the settings you can find detailed information on the different types of cookies and object to the use of cookies. As an asset manager, the security of your data is highest priority to us. You can find further information in our privacy notice.
