Which demographic change can contribute to the development of a real estate bubble?

Mass urbanization and population growth can significantly contribute to the development of a real estate bubble because these demographic changes often lead to increased demand for housing. When large numbers of people migrate to urban areas, the concentration of population results in heightened demand for residential properties. If the supply of housing does not keep pace with this rapidly increasing demand, prices can rise sharply, potentially leading to speculative buying and investment, which are key characteristics of a real estate bubble.

Furthermore, as people flock to cities for better job opportunities and amenities, the scarcity of available properties can drive buyers to compete for housing, driving up prices even further. This influx can create a sense of urgency and a fear of missing out among potential buyers, further inflating property values. Hence, while other demographic shifts may influence the housing market, mass urbanization and population growth have a particularly strong and direct impact on the creation of real estate bubbles.