Real Estate & Millennials
When Selling Property to Millennials; be valuable.
Young women are at the forefront of the real estate market. Data confirms the rate of millennials, especially women that are investing in land and houses has been growing by 20 per cent annually since 2013. This trend has been attributed to the growing population of young people with a forward-looking attitude, armed with investments plans and who are hungry for money and prestige.
Millennials are young people born between 1980 and early 2000s. These are people that entered adulthood early in the 21st century, officially lauded as the biggest generation in terms of numbers. They are well educated, tech savvy, more likely to take risks, heavily reliant on mobile phones, the internet is their domain and look for immediate gratification and recognition.
According to PWC’s report on emerging trends in real estate for 2017 which analysed the millennial’s preferences in the housing market, density, diversity, walkability, and transit accessibility dominate their demands in the housing market.
Saffir Africa is a destination marketing company that conducted an online survey to look at, ‘How Kenyan Millennials Travel.’ The report sought to understand the decisions Kenyan millennials make before they book their travel, and why keen attention must be paid to the new-age traveler; the millennial.
“To them, experiences matter more than material things; hence they would rather travel the world than buy property. They have a strong sense of value and affiliation, are purposeful buyers who are also budget conscious,” says the report.
Upon enquiring why millennials travel, more than half of the respondents said that their travels are not premeditated, while nearly a third take planned breaks. The report concludes that the millennial is a digital savvy traveler who values a combination of good experience and affordable price in a group, so as to take advantage of pre-negotiated rates for the collective.
Real estate industry players need to capitalize on the latest trends in the housing market, to capture this new generation of buyers. However, the question begs, is housing the most important thing to the millennial generation? A few facts could provide some insights.
In September 2017, Trends and Insights for Africa (TIFA) carried out a job market survey targeting Kenyan job seekers. The population sample included individuals aged between 25 and 34 years. The survey revealed that most job seekers care more about remuneration and benefits, followed by career progression, a conducive work environment, and job security.
They want to be happy in their jobs and happiness constitutes the four factors mentioned in the survey. An overwhelming majority (80 percent) leave employment within a year and most are leaving for better opportunities focused on the four factors mentioned above. That being said not only do these statistics prove that millennials value personal gratification, but that they are not the most patient lot and so buying a house may not be a top priority for them.
The reasons for this are numerous. Millennials feel economically challenged, and many are saddled with student loan debts that they would like to pay off before moving on to the next stages of their lives.
They also do not want to be stuck in one geographical location. If their jobs move or they need to quickly find a new job, they want the ability to move quickly in order to take advantage of new economic opportunities. Millennials are looking for affordable apartments with functional layouts; they are comfortable with efficiently designed studios and one-bedroom apartments. While older generations typically look for larger apartments.
When it comes to building apartment complexes for millennials, it is important to add amenities into the floor plans and the layout of the entire complex. While previous generations were happy with a pool, clubhouse and fully-equipped gym, millennials tend to want open spaces that they can personalize for a short amount of time. For example, instead of building a fully-equipped gym, think about building a multifunctional, cardio class workout studio. This allows the resident to bring their own equipment and exercise according to their own needs.
Millennials are also connected to the Internet 24-hours a day through their cell phones and other mobile devices. They are more likely to spend their money on premium cable TV packages and Netflix than solid objects. For the items they do purchase, they prefer to shop online.
Apartment complexes that cater to young adults should be cable and Internet ready. Complex-wide Wi-Fi is also a plus as are lots of indoor and outdoor electrical outlets for charging mobile devices.
Marketing to Millennials
Since millennials receive most of their information online, property management companies must have a presence on social media websites, including Twitter, Facebook, YouTube and Instagram, with marketing campaigns created in collaboration with agencies such as The Marketing Heaven. They should also have a detailed web page outlining the apartment complex and its amenities. Marketing the complex in these ways increases the odds that millennials will call or stop by the office for a tour and fill out an application.
When it comes to marketing apartments to millennials, it is important to give them the facts rather than simply tell them they will love the complex or community. Young adults want to feel like they are making an informed decision rather than simply being told what to buy.
With millennials making up the majority of the new apartment market, their importance to the construction industry cannot be overstated. Their generation is the key to our success moving forward.
Constructing Housing for Millennials
For millennials, buying property may not be at the top of their list of priorities unless they are strongly incentivized to do so. They have somewhat different values and preferences compared to the previous generation. They seek greater functionality and convenience so they tend to opt for apartments. Their decision making is usually not based on size or location but rather on convenience and functionality.
Millennials are looking for living spaces that are compatible with their lifestyle. Spaces where health and sociability is combined. Millennials also truly value community based attributes such as access to coffee shops, food courts and recreational areas. If these facilities are not included in the complex layout, they would at least want it to be available in close proximity.
Millennials are also increasingly moving towards minimalism. The decision-making patterns, lifestyle, usage of money and experiences they expect from life is rather different to the previous generation. The minimalistic lifestyle trends of millennials have made entrepreneurs and real estate developers to rethink their strategy when designing living options to cater to this segment of the market.
Typically, the spending power of the millennial is less compared to the previous generation therefore, they prefer to spend on the style of life as opposed to the possessions in life. This creates a unique set of challenges and opportunities for real estate developers.
Nothing is out of reach for the millennial, you just need to catch up with them!