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More millennials are beginning to see the benefits of investing in property. (iStock)
- Millennials are increasingly opting for a smaller private space because they are concerned about affordability.
- Baby Boomers (born between 1946 and 1964) tend to prioritize a larger house, which accommodates larger families.
- The average and most active real estate investor who buys in SA is a woman and less than 30 years old.
Millennials, defined as those who are currently between 24 and 39 years old, represent almost 30% of the total population according to Statistics SA, and also represent the largest generation to enter the country’s workforce (51%).
When buying property, Millennials prioritize living in a good neighborhood with easy access to lifestyle centers, restaurants, and shopping. This is one of the findings of a recent survey by urban real estate development firm Blok.
“Baby boomers (born between 1946 and 1964) tend to prioritize a larger household, which accommodates their generally larger families, while millennials settle down later in life and have fewer children than previous generations. therefore, the size of your home is less important, “says Jacques van Embden, Managing Director of Blok.
What is important for them is proximity to both the city and nature.
“We are seeing a trend of ‘living away from home’, where Millennials are looking for the lifestyle benefits that a given area offers, rather than a larger private space,” says van Embden.
Another reason millennials are increasingly opting for a smaller private space is because they are concerned about affordability, especially with the economic impact of the coronavirus pandemic. This makes price a key factor influencing where they choose to live. The vast majority of respondents indicated that they could only afford a property with a maximum price threshold of R750,000.
“While our research has shown that this category of buyers want to own a property, they also need to be able to close it and leave when a travel or work opportunity arises. They need a home that allows them to do this, and as a result, developers are designing more agile products that adapt to market movements, joining shared spaces with an offer with services “, explains Van Embden.
Research from property analysis firm Lightstone shows that, in terms of the age of buyers, it is the Millennial age group that buys the most properties, followed by the 40-49 and 49-64 age groups. Freehold property remains the most popular property type, followed by sectional title and housing.
The pandemic and the Covid-19 lockdown have been a catalyst to highlight the different characteristics, as well as the commonalities of preference, among several generations of home buyers, according to Dr. Andrew Golding, CEO of the Pam Golding Property group. .
Says “boomers” (those currently in their 50s and 60s) who raised a generation of millennials are now, more than ever, investing in the comfort, safety, and spaciousness of lifestyle properties. in more rural settings, but still with easy access to centers and services, including sports and leisure activities.
The lockdown has also highlighted a trend that Golding expects is likely to pick up further momentum, namely multigenerational living. He says this trend is already evident on properties, with parents, adult children and grandparents living on the same property.
According to Golding, with low interest rates and banks that retain their appetite for loans, even giving out 100% bonds, more singles, both men and women, and young couples are taking advantage of value-for-money opportunities to acquire their first homes. . Others opt for coexistence, sharing common spaces such as living rooms and coworking spaces in privileged locations in cities.
One notable trend, according to Golding, is the rise in female shoppers, part of a trend toward more one-person households, along with an increase in female-headed households or delayed marriage. A few years ago, the typical real estate investor in South Africa was a male in their 30s and 40s, but the latest figures reveal that young women are now driving the investment market.
“The most active average real estate investor buying in South Africa today is a woman in her early 30s,” says Michelle Dickens, CEO of the TPN credit agency. She says the historically low interest rate has resulted in a significant change in rental and purchase patterns.
“While we used to see millennials stay in rented accommodations for as long as possible, more are beginning to see the benefits of investing in property,” he says.
