Why invest in senior housing

As the population ages, there is a growing need for housing options specifically designed for seniors. This trend positions senior housing as a relatively low-risk investment category, offering attractive returns for investors seeking to diversify their portfolio.

Italy is undergoing a major demographic shift, leading to a population that is predominantly elderly. And recent statistics from Eurostat reveal that our country now has the highest proportion of elderly citizens in Europe. Despite this, there is a noticeable scarcity of facilities specifically designed to to meet the needs of our senior citizens.

Despite this, there is a noticeable scarcity of facilities specifically designed to to meet the needs of our senior citizens. In the past, families were larger and played a pivotal role in caring for their elder members. However, evolving social dynamics and work commitments have made it more difficult to provide this traditional family-based care. As a result, there is a rising demand for housing solutions specifically suited for the elderly, offering a significant opportunity for real estate investors. By focusing on this sector, they can not only improve the living conditions of our aging population but also secure a profitable financial return.

What is Senior Housing?

Senior Housing refers to specially designed rental accommodations for self-sufficient individuals aged 65 and older. These are typically independent apartments located within larger complexes that also feature a range of common spaces and services, enabling residents to enjoy communal living while still preserving their personal privacy.

Known also as Senior Co-Housing, this particular housing model for older adults originated in Northern Europe and has been gaining popularity in the real estate market over the past few years, increasingly appealing to investors. The idea is to offer quality living space with a lighter support and assistance structure compared to traditional nursing homes. This model is specifically designed to meet the evolving needs of today's elderly population, which are markedly different from those of previous generations

Seniors outnumber the youth

It's a well-known fact that Italy's population is predominantly older, as evidenced by data from ISTAT, the country's national statistics institute. Currently, there are 14 million and 177 thousand people aged 65 and older, making up 24.1% of Italy’s total population. And predictions indicate that seniors will reach 34.9% of the population by 2050. Additionally, the number of people aged over 80 is projected to surpass 6 million by 2041 (source: 2023 Annual Report).

This demographic shift presents both challenges and opportunities for the country. Key issues include ensuring adequate healthcare for the elderly and promoting active policies to maintain their well-being and quality of life. In this context, the concept of Senior Housing is emerging as a promising solution to help the elderly lead active lives. It offers the necessary care and support while also ensuring they have the freedom to participate in various activities and maintain social connections.

The gap between demand and supply

In Italy, the availability of Senior Housing options is still markedly scarce compared to other European countries, even though demand is on the rise. A mere fraction of residential facilities for the elderly cater to self-sufficient seniors, with most of these concentrated in the larger cities of Northern Italy. This shortage primarily stems from a historical focus on standard housing models, overlooking the need for diverse options suitable for different market segments.

Recognizing the rising demand for senior housing, it's crucial for the real estate sector to adapt to this market shift.. And introducing more housing choices for independent seniors is not only vital for improving their quality of life but also represents a valuable investment opportunity in a sector poised for growing significance.

Investing in Senior Housing as a recession-resistant strategy

Senior Housing can be considered a resilient and counter-cyclical asset class, because it is largely immune to economic downturns and recessionary phases. This inherent stability makes it as an attractive investment choice, comparable to other alternative real estate investments like Student Housing.

The rationale behind this is simple: the steady aging of the population, coupled with a growing awareness of the importance of elderly well-being, drives the demand for Senior Housing. This demographic shift guarantees a consistent and stable customer base in the long term. Unlike other investment categories, Senior Housing is less prone to occupancy fluctuations during economic downturns. As a result, investing in Senior Housing presents a significant business opportunity for both institutional and private investors, mitigating the effects of adverse economic cycles.