Who will buy all these houses?

And this time it’s not just because of the financial crisis – it’s more to do with falling birth rates and the general ageing of the Portuguese population.

This forecast comes from the Bank for International Settlements (BIS) which has just published its study «Ageing and asset prices”. The document seeks to measure the effects of ageing populations vis-à-vis house prices.

And if it’s to be believed, Portugal is the European country that will feel the most impact when it comes to house purchasing affected by demographics. Between 2010 and 2050, we’re expected to see an 80% drop in house buying.

Spain, Greece and Germany are the other European countries that will most feel the effect, all around the 75% mark – as opposed to Switzerland which will stay close to a 20% negative impact. The trend is all due to the fact that there aren’t expected to be any baby booms – which justify changes in the property market – in the immediate future.

Nonetheless, and as is habitual in economics, it’s unlikely that the fall-off in house purchasing will mean house prices drop like the proverbial stone anytime soon.

Author of the study, Elöd Takáts, from BIS Monetary and Economic Department stresses that “though the results do not imply absolute real price declines, they suggest that in the next forty years house prices in advanced economies will face a more difficult environment than in the past forty years.”

It’s unlikely, for instance, that conditions will return to those of the baby boomer years of the 60s – which according to Takáts were responsible for the increase in house prices in 40% of the United States.

His study also alludes to the fact that the increase in the number of elderly people constitutes, short-term, a huge challenge for the pension and healthcare systems (both state and private).

Reduction in the “active” population will also slow-down growth in economies, and is one of Europe’s major problems.