To break the cycle, the WEF highlights intergenerational housing models.
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PERIASAMY M
Housing unaffordability will remain a defining economic and health challenge through 2040, with the World Economic Forum and Marsh warning that without intergenerational solutions, financial stress, poor health outcomes and wealth erosion will compound across both young and older adults.
The report argued that new models for lifelong living are emerging to address the housing challenges affecting younger and older adults, and that intergenerational collaboration will be critical to preserve the stability of financial and social systems. It points to projects in Spain, the UK and Hong Kong as examples of how quality, community and affordability can be put at the core of housing policy.
The scale of the problem is global and persistent.
Analysis across 21 countries shows that in 20 of them, monthly mortgage and rental payments exceed 33 per cent of monthly income – the threshold at which housing is considered affordable. The burden is most severe in Nigeria, Colombia, India, Indonesia, Vietnam, Brazil and Mexico, where monthly payments exceed 100 per cent of an individual’s average monthly earnings.
Even in countries where prices have fallen relative to wages, affordability has not improved. In Brazil, India and Indonesia, prices dropped more than 15 per cent over the past decade, yet payments still outstrip a single person’s earnings.
Vicious cycle
Demographic pressure will intensify the strain.
Between 2025 and 2040, the population of older adults in high-growth economies is likely to increase more rapidly than in already aged countries, forcing younger workers to balance rent or mortgages with saving for longer lives and caring for multiple generations.
The WEF notes that expensive housing may push people into poor-quality, cramped or isolated homes away from jobs and services, creating a vicious cycle of financial stress, medical expenses and reduced long-term savings.
The report also flags behavioral consequences.
With wealth accumulation blocked, younger adults are embracing risky financial strategies such as speculating with cryptocurrency and prediction markets. In high-income OECD countries, rising prices since 2015 have pushed more young adults to live with parents into their twenties.
Way forward
To break the cycle, the WEF highlights intergenerational housing models.
In Spain, Kuvu connects older homeowners with young renters, reducing loneliness while providing income for older adults and affordable housing for renters, with a public-private partnership in the Basque region helping to scale it. In London’s Southwark, the Appleby Blue Almshouse won the 2025 RIBA Stirling Prize for reimagining social housing for older adults, offering a high-quality alternative to ageing in place and freeing up larger family homes. In Hong Kong, Forward Living uses Nordic design principles to make institutional care feel like home, prioritising dignity and autonomy.
The report concluded that housing must be reframed as a lifelong issue, not a generational one. Acknowledging the challenges faced by all generations can facilitate collaboration and drive better outcomes for all, it says, as countries race to link housing policy to health and wealth before the 2040 demographic shift peaks.
Published on July 12, 2026
