This is a question you might still have after my last article.
You might have gotten lost in the details about the different requirements for building a healthy home or a wellness real estate project.
So, let’s first observe the whole market and demand situation with an eagle eye and then dive deeper into concrete projects in future articles.
Because my last article was a bit dense, I have a shorter one for you today, without that many details and technical stuff.
According to the Global Wellness Institute (GWI), wellness real estate was a $134 billion worldwide industry in 2017.
Since 2015, it has grown every year by 6.4%.
To help you make an idea about the further potential of this market, let’s compare it to the construction market and the size of the green building industry.
The wellness real estate industry is only 1.5% of the total annual worldwide construction market and about half the size of the worldwide green building industry.
The latter was estimated at $260 billion in 2013.
According to the GWI, this industry is projected to grow to $180 billion by 2022, growing by 6% annually in the next several years.
For their statistics, they counted different constructions of residential and commercial or institutional properties that include wellness elements in their materials, design, and building as well as in their services and/or programs and amenities.
You can assume not all of these projects fulfilled each and every requirement to qualify for the Living Building Standard.
When it comes to wellness real estate, you can count the properties that are a bit wellness “injected” and those that are completely “injected” and cover each and every wellness aspect.
Consumer demand increases every day
As investors, we usually want to make a profit meaning that we can create a value differential by negotiating well or building something that the market values higher than what we paid for it.
So, every entrepreneur or investor needs to know something about the needs or the demand of the market.
The good news? There is a rising consumer interest worldwide in the wellness real estate industry.
The bad news? It’s actually good news as well – real estate investors aren’t yet aware of the potential that this market niche bears.
More and more consumers want to extend their wellness experiences from their vacation destinations to their homes.
This is the reason why wellness resorts and destination spas add more and more residential components to attract buyers looking for second homes or vacation properties to enjoy the wellness lifestyle part-time or even full-time.
Another development in the market is that upscale residential properties such as master-planned communities and luxury properties add more and more wellness components to attract higher-income consumers.
Some of these components are:
- enhanced water, lighting and indoor air
- fitness centers and spas
- health food restaurants
- classes and other programs
- on-site fulltime wellness professionals
As you may know, the barriers to entry are lower for mid-priced homes for beginning investors.
So you might think that this is only something for investors playing in the luxury real estate market segment.
But nothing is further from the truth because an increased demand is also coming from the middle-income consumers looking for neighborhoods and homes that support a healthy lifestyle through features such as dog parks, community gardens, farmers’ markets, bike paths, access to public transport, and better walkability.
This demand doesn’t even stop there.
Wellness design features are also added in the lower-income housing segment helping to improve critical public health needs.
All mentioned segments are expected to grow.
25 Countries with the Largest Wellness Real Estate Markets in 2017
|United Arab Emirates||$446|
5 Market Studies About the Demand in the Wellness Real Estate Industry
Study 1 – American Lives Study:
American Lives recently conducted a study called The Health and Wellness Survey.
This study confirmed that there is a large interest from consumers in wellness lifestyle real estate and communities.
It surveyed a representative sample of U.S. households (with incomes over $75 000), that had the right profile and were interested in living in wellness communities and in wellness services in such communities.
- 25% of the respondents were highly interested in living in a wellness community full-time or part-time. Their profiled as “wellness enthusiasts” and considered their health and wellness and that of their neighbors as an essential element of their living environment.
- There was no correlation between income, age, education, or gender and interest in wellness communities urging a broad appeal of this type of housing.
- Additionally, 51% of the respondents showed a strong interest in wellness offerings and services and also in owning a second home or vacationing in a wellness-focused property or setting.
You can conclude from only these findings that there is evidence for a strong demand of wellness lifestyle real estate and wellness communities in the United States.
Let’s just imagine for a minute that conservatively only 10% of the so-called “Lifestyle-Enthusiasts” are looking for houses every year.
This would translate to 1.3 million potential buyers in the United States.
This exceeds the supply of wellness properties in the market.
This strong growing demand is not a phenomenon limited to the U.S.
In the United Kingdom, India and Australia buyers and tenants are also becoming more aware of the unhealthy aspects of their living environments and are looking for better options.
This leads to the next study.
Study 2 – UK Green Building Council
In this study, 90% of UK buyers and tenants were surveyed.
They were asked whether they would pay a higher price for a home that “does not compromise their health and wellbeing”.
Close to 30% responded that they would be willing to pay a higher price for this type of home.
These results partially answer the question from the end of my last article, if a certified healthy home project or wellness real estate investment with higher building costs and therefore higher asking prices or rental prices could even be profitable.
Study 3 – Tata Housing
Around 88% of the Indian consumers are interested in “wellness-injected” properties, according to a nationwide study by Tata Housing.
Furthermore, about 69% of them consider clean water and air and an overall healthy atmosphere as “very important”.
Study 4 – Ikea
Ikea also conducted a study in Mumbai.
They found that 39% of the respondents would like to reduce noise in their homes to improve their quality of life. This is not only a phenomenon in Mumbai.
Noise pollution is an issue in almost all rapidly urbanizing developing countries.
Study 5 – Honeywell
The company Honeywell conducted a study in China.
According to it, 60% of the Chinese people are worried about indoor quality and about 47% would pay a higher price to have an improved air quality in their homes.
I know, there is still no concrete number broken down from one specific project.
But we can already conclude that the demand is increasing every day and the supply is far from meeting the current demand.
You don’t have to wait long, I have about a hundred concrete projects that already exist in my pipeline and I will share them with you in future articles.
In these articles, I will interview the investors and/or developers to get you some hard numbers.
My next article will take a closer look at the worldwide project pipeline.
Real Estate Dealmaker | Crypto-Trader | Author
Follow Me On Twitter…