The Silent Collapse That Could Crush Property Values

Forget tariffs, trade wars, or inflation… the most significant economic crisis of our lives is quietly unfolding: global population collapse. 
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According to the UN, 60% of countries now have fertility rates below the replacement level, and soon, it will be in nearly 100% of countries.
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And yet, despite the overwhelming data, the mainstream narrative still clings to fears of the exact opposite… overpopulation. It’s ridiculous.

Our collective fertility rates are plummeting, and the implications for real estate will be profound.

Humanity will likely hit peak population around 2040, followed by an unprecedented decline. This is not some nuanced topic of discussion for economists to pontificate over. If you’re 60 years old or younger, this will impact your quality of life and personal wealth. It is the biggest threat to our economy, ever.

Countries like China, Korea, and Canada have already dipped well below the replacement fertility rate of 2.1 children per woman. China is now actively shrinking, losing millions from its population annually. Even India's fertility rate has fallen below replacement levels.

I want to emphasize that this is not just an abstract demographic problem. It’s an economic tsunami headed straight for real estate. Have your doubts? Keep reading.

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The Cultural Shift Killing Fertility Rates

Contrary to popular belief, affordability isn't driving this demographic shift. If kids were free, would society suddenly have more? Data from countries with generous child incentives, like Hungary and Sweden, suggests otherwise. The real culprit is culture.

We've entered an age where family formation takes a back seat to individualistic pursuits: career advancement, personal freedom, and lifestyle comforts.

Social media celebrates this individualism.

Young couples now choose dogs over diapers and yoga retreats over youth soccer games.  This isn't just anecdotal; it's a pervasive cultural trend reshaping society for the worse…

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Real Estate's Hidden Vulnerability

Real estate's strength is predicated on growth. More people, more housing, higher values. But what happens when people become scarcer?

Japan provides a cautionary tale. Shrinking by a million people annually, the country struggles to maintain economic growth. Urban real estate suffers the most, with empty apartments and declining property values becoming the norm rather than the exception.

Canada could face a similar fate. Downtown condo markets in cities like Toronto are softening as young families prefer suburban single-family homes. Yet developers, addicted to past trends and municipal incentives, keep building high-rise skyboxes that fewer people genuinely desire.

I know what you’re thinking… Japan has virtually no immigration and Canada is an immigration magnet… that may change soon.

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Canada’s Immigration Illusion

Canada has long relied on immigration to bolster population growth, propping up real estate values in cities like Vancouver, Toronto, and Calgary. However, immigration is becoming fiercely competitive globally. Europe, facing its own demographic cliff, will fight tooth-and-nail for skilled immigrants from shrinking pools in India, China, and eventually Africa.

This competition means Canada's historic immigration advantage could rapidly erode, exposing real estate markets dependent on continual inflows of newcomers. If you doubt competition for immigrants from other nations will negatively impact Canada’s ability to grow its population, just compare the weather in Toronto to that of Madrid, Florence or Lisbon. Canada may not fare well when more options open up for skilled immigrants.

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The Real Estate Reset

Expect an awakening over the next decade. Office real estate, already battered by remote work trends, faces even deeper uncertainty. Urban condos targeting young professionals may languish unless developers pivot to serve aging populations or families who desire suburban amenities in urban settings.

Meanwhile, the single-family home, the true aspiration of most Canadians, is increasingly rare (thanks to zoning laws and municipality mismanagement) and fiercely defended by boomers reluctant to sell. This misalignment between supply and genuine demand will amplify market instability.

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Navigating the Demographic Storm

Our population growth trend will end. Within a decade or two, we will see it decline. So, real estate investors and developers must recalibrate their strategies. Properties must appeal to evolving demographics…fewer children, more retirees, a smaller workforce. Locations near healthcare, suburban comforts, and quality-of-life amenities will outperform traditional urban cores focused on dense, youthful populations. Downtown cores in some cities, Toronto comes to mind, will be hollowed-out.

The question isn't if property values will feel the impact, it’s how dramatically.

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