What is the impact of urban living on less developed countries?
According to the United Nations, Africa and Asia are urbanizing faster than any other region. Forecasts predict that the two continents will become 56 and 64 percent urban, respectively, by 2050.
Rapid population growth has led to physical growth of urban areas. Consequently, cities must adapt to increased demand for affordable, yet high-quality housing, commercial and industrial space, as well as infrastructure development.
As the emerging markets urbanize, cities are becoming increasingly populated by young, educated workers. These younger populations are more affluent, with growing amounts of disposable income; as they move from rural areas to more developed cities, this population bracket gains purchasing power, resulting in growing pressure on housing, infrastructure and industrial development.
The growing middle classes in many emerging markets are contributing to this urban shift. As income rises, more money is available to spend on high-quality services, including luxury housing.
With increased economic power, this population bracket is demanding high-quality, mixed-use developments, to meet their commercial, residential and retail needs.
Ghana is one such country experiencing rapid urbanization. Regions such as Greater Accra, Western and Ashanti have seen an average 6 percent increase in urbanization between 2000 and 2010.
Interestingly, Greater Accra was the region with the highest urban penetration rate, jumping from about 87 percent to 90 percent (2010 National Housing and Population Census). The challenge for countries such as Ghana is meeting the infrastructural gap.
Whilst urbanization to date has been rapid, this is only the beginning for the emerging markets. The development of transport, water, energy supply and technology will continue to draw both residents and investors to cities across Asia and Africa.
Kian Moini, Co-Founder and Managing Director of global real estate portal, Lamudi, states: “Africa is expected to see a rapid rate of urbanization, with a 16 percent increase in its urban population by 2020. In Asia, statistics show that almost 200 million people moved into cities between 2000 and 2010.
With this growth comes expansive opportunities on the continent, with the creation of new jobs, development of improved infrastructure and more affordable housing options. This is not to say that there won’t be challenges.”