Millennials are seen as digital natives, fast-paced, inquisitive, and critical – and have challenged the status quo across most industries
However, there is an entirely different side to this generation, one that has been largely overlooked but is slowly being recognised more and more. And that is: millennials and their impact on the property market.
The millennial market is on the rise, says Mike Greeff, CEO of Greeff Christie’s International Real Estate and according to Statistics SA, they make up 28% of our entire population. They are at an age, and stage of life, where they are having an increasing influence in the property market.
Real estate trends set by millennials
Millennials would rather rent
More and more millennials are opting to rent, and this is solely due to the ever-increasing cost of living and the unpredictable and challenging South African economy.
Glenda Taylor, Principal of Rentals for Greeff Christie’s International Real Estate says that those born between 1980 and 1990 make up approximately 25% of their tenants.
A lot of this generation also wish to stay in trendier, more high-end suburbs, like Woodstock or the CBD, and because they can’t afford to buy in those areas, they choose to rent
Millennials are also known as the ‘’experimental’’ generation – they are never in one place for too long – so renting provides them with that freedom to just pick up and move, with relative ease.
Home ownership is still of great value to this generation and many wish to invest in property at some stage, but life events and the current economic climate might delay the process.
With that being said though, the conditions are favourable for first-time buyers at the moment and now is the opportune time for millennials to enter the market, if they are able to do so.
Energy efficiency is key
The majority of millennials desire a minimalist lifestyle because it provides them with both the flexibility and financial stability they want and need. It’s for this reason that they are opting for smaller lock-up-and-go living spaces and fewer possessions.
Another must-have for millennials is energy-efficiency. Millennials are looking to reduce their carbon footprint, while reducing their monthly living expenses too.
Millennials are looking for a place where they can work, play, and meet all their other lifestyle needs all in one spot
There is an emerging trend in real estate this year called “hipsturbia” and essentially, it’s the term that refers to denser, mixed-use developments in well-situated areas i.e. major metropoles.
Millennials are looking for a place where they can work, play, and meet all their other lifestyle needs all in one spot. They no longer want to waste precious hours sitting in traffic or wake up before dawn just to make it to the city on time – instead, they want a place where everything they need is in one convenient location.
Greeff says that ”in many ways, mixed-used developments is a response to technology influencing our lives in every aspect – whether it is a positive influence or a negative one”. The idea behind a mixed-use development is to encourage interaction – especially because it combines various, multi-purpose properties – from residential, retail and hospitality – to commercial office space and public areas, with each spot attracting different types of people, who interact with and sustain each other.
Millennials appreciate the convenience that comes with developing a mixed-use precinct
To be able to have their workplace, home, and entertainment all within working distance provides easy access to the necessities that foster the engagement with both brands and people that younger generations have come to expect.
Mixed-use developments are the future, and it is the ideal property for millennials to make their mark in the property sector. It combines everything you could possibly want or need and it’s the perfect spot to live your best life.
As millennials begin to settle down, we will start to see their influence grow even more than it already has. The real estate industry will need to take their needs and desires into consideration and adapt and innovate accordingly. The millennial market is one full of untapped potential – it’s just waiting for offerings that tick all its boxes.