Real estate bulls don’t want to hear it, but the writing is on the wall. The golden age of ever-rising home prices is coming to an end. Demographics don’t lie, and markets can’t escape reality forever.
For anyone still convinced real estate is a surefire investment, look at Japan. Nine million homes sit empty, and no one wants them—not even for free. It’s not just a fluke. It’s a glimpse into the future of Western housing markets, where aging populations and shifting demand are set to shatter the illusion of endless appreciation.
The math is simple. The Boomer generation, the largest in history, owns 40% of all real estate. Over the next 15 years, millions of those properties will hit the market as their owners pass away. The problem? There’s no generation large enough to absorb them at current prices.
Millennials, burdened with debt and years of stagnant wages, already struggle to afford homeownership. Gen Z, even smaller in numbers, faces the same uphill battle. Who’s left to buy? Institutional investors have propped up the market in recent years, but even they have limits. Once it’s clear that prices are heading lower, they won’t stick around to catch the falling knife.
It’s a pattern that played out in Japan decades ago. The post-bubble collapse left entire neighborhoods abandoned. Homes that once commanded high prices became liabilities. The same forces are in motion across the U.S., Canada, and Europe. The difference is that Japan had cultural and policy mechanisms to soften the blow. Western economies aren’t as prepared.
The real estate cycle moves slowly, but the endgame is clear. The supply wave is coming, and demand won’t keep up. Those clinging to the belief that prices will only go up are in for a rude awakening.