Districts across Prague are busy borrowing an idea that first took off in the Netherlands, where students are offered the chance to rent low-priced apartments in nursing homes in return for volunteering 30 hours each month to help organise activities for the old residents. But as well as offering cheap housing for needy students and some welcome company for the elderly, the scheme also highlights how ageing societies like the Czech Republic will require increasing amounts of senior housing, presenting a new real estate investment opportunity over the coming decades.

According to new Savills research, investment in the European senior housing sector – which includes apartments, cottages, condominiums and single-family housing facilities intended for the elderly – totalled more than €700 million in the first three quarters of this year, a record high and more than double that recorded during the whole of 2018.

GREYING OF THE POPULATION

The reasons for this are not hard to discern. The Savills “European Senior Housing Report” cites the fact that European countries are among the world’s most aged as people live longer and birth rates fall. Czechs over the age of 65 now make up the most dynamically growing population group, comprising almost 20 per cent of the country’s 10.6 million population. The Czech government, in its latest Convergence Programme submitted to the European Commission, forecasts that over 65’s will make up 56 per cent of the total population by 2060.

At the same time, major societal changes are taking place. Most European countries are among those with the highest proportion of the elderly living alone, who are increasingly demanding more privacy and independence in their post-retirement years. And they have the money to make this happen; between 2010 and 2017, the median equivalised net income of Europe’s population of 65 or over increased by 19.6%, compared with 16.9% for the working-age population.

To establish where in Europe the senior housing market has most potential for growth, Savills has developed the Senior Housing Opportunity Index. This index measures 23 European countries against 17 metrics that assess the demographic change potential, identifies the best and the easiest housing market to enter, and evaluates both private wealth and government pension levels.

The results show that the top five hotspots for senior housing are Germany, France, the UK, Italy and Poland, with each country backed by different prevailing drivers. Poland, for example, has one of Europe’s fastest growing elderly populations combined with the lowest number of dwellings per inhabitant, making it a good prospective country for the senior housing market.

The Czech Republic is the next Central and Eastern European country after Poland expected to see the most growth in the senior housing market with a score of 46.7 on the index, which places it in 15th place out of the total 23 countries surveyed. Like Poland, the Czech Republic has a fast aging population, and it also has a relatively high ‘wealth & pension’ score for a CEE country, primarily due to the surge in house prices experienced over the past decade.

CEE countries like the Czech Republic could also benefit in future from retirees in Western Europe looking to secure senior housing in a country where the cost is lower than in their home country. If that’s the case, it might be language students that are most in demand in Prague’s nursing homes.