Spain will be one of the developed countries where property prices are hardest hit by an ageing population, argues a new report from the Bank of International Settlements (BIS).

It forecasts that by 2050, an increasingly elderly population will leave Spanish property prices 75% lower in real terms than they would have been without the ageing population factor. That means prices off by 2% every year to 2050.

Spain has one of the lowest birth rates in the developed world, and one of the fastest ageing populations. As the population gets older, demand for housing falls and needs change.

In Europe, only Portugal comes off worse. House prices there will be lower by 80%, as forecast by the BIS.

No developed country escapes the negative effect on house prices of an ageing population, but some come off better than others. The negative impact is forecast to be lowest in Nordic and English-speaking countries.

Demographics was not the only variable modelled by the BIS; they also took account of social, cultural (divorces, smaller houses, second homes), and economic factors.

Nevertheless, the biggest driver of house prices are demographics. Baby boomers buying homes drove up price in the last 50 years, and they will drive down prices as vendors in the next 50.

However, there may be mitigating factors, says the BIS, so a sudden collapse in house prices is not on the cards. For example property prices haven’t stopped rising in Italy and South Korea, where population ageing is already well advanced.