There are approximately 18.74-million generation X consumers in the country, however, millennials account for around 28.4-million of the population. This up-and-coming generation will have a massive impact on the economy and more specifically the property market going forward. As the future decision makers, millennials will be able to change the real estate industry as we know it and will largely influence trends that we see unfold. To a large degree, we are already seeing trends develop as more and more millennials influence the dynamic of the real estate sector.
Buying and lifestyle habits of millennials that will shape the economy and real estate industry:
There are a number of reasons that these younger generation consumers favour renting over buying. Given the increasing cost of living and challenging economic conditions in South Africa, many millennials are opting to stay in the rental market a while longer. There is also the desire to stay in trendier, often more expensive areas that they would not afford to buy in. Renting offers them the freedom to pick up and go with relative ease. While millennials want their own space, many feel that they are not ready to manage a property and prefer to have a landlord take care of the maintenance issues.
Most do value homeownership and will invest in a property as they get older, however, rising debt and delayed life events will delay the process. When they do purchase a home it is likely to be an entry-level home that they can rent out if they decide to move away.
Millennials are heavily reliant on technology and are more likely to use online search portals to find a home they like than going through an agency. In order to stay relevant, real estate professionals will need to have a strong online presence to successfully engage with the millennial generation. This includes a website with high quality images of homes and an engaging social media presence.
A large number of millennials are looking for a minimalist lifestyle which includes fewer possessions and smaller living spaces, as this provides them with both the flexibility and financial stability they want. Generally, millennials don’t want to spend all their time at home but see their living quarters as more of a home base. As a result, they are comfortable in smaller, lock-up-and-go spaces. Many are also looking for homes with energy-efficient appliances and fittings so that they can reduce both their monthly living expenses and carbon footprint.
In order to cater to the wants of millennials, the industry will need to keep increasing its energy-saving home offering. Environmentally friendly, multi-functional spaces are highly appealing to millennial home buyers.
Millennials have already started to impact housing market trends and will grow in influence as their incomes increase and they begin to settle down. As this generation continues to effect change, the real estate industry will need to take their needs into consideration and innovate accordingly.
