Advice and Opinion

Millennials and the property market

Millennials are the next big wave of home buyers and it’s important that property sellers – and their agents – understand where and how these young people prefer to live.

“For a start,” says Rawson Property Group Managing Director Tony Clarke, “one needs to accept that this generation of buyers – currently in their 20s and early 30s – has very different ideas about what makes a perfect home from the Baby Boomers and Generation X buyers that came before them”.

“A major study done by global research company Nielsen in 2014 found, for example, that 62% of Millennials would prefer to live in a mixed-use or live-work-play community in an urban centre, where they can preferably walk to work, shops, restaurants, and the gym”.

“Indeed, the survey revealed that Millennials are currently already living in urban areas at a higher rate than any other previous generation, and that 40% of them are not planning to leave the city and relocate to the suburbs in the future.”

But while they may not be keen on the suburbs, he says, there is quite a large contingent of Millennials that do like the “alternative” idea of living in a small country town, provided that everything they need is also within walking distance, and that the town has excellent cell phone and internet connectivity to enable them to work remotely.

As for what type of property Millennial buyers are most likely to choose, Clarke says, it is not really surprising that most of these very busy people prefer smaller homes to larger ones requiring a lot of upkeep, but what is interesting is that they also generally don’t like “cookie-cutter” apartments, townhouses or clusters that all look the same or have the same floorplan.

“Millennials are big on individuality and on DIY, and these characteristics definitely spill over into their choice of homes. In fact, a Better Homes and Gardens survey conducted last year found that 30% of Millennial buyers would actually prefer a complete fixer-upper that they can transform to reflect their own tastes and style over a home that needs only minimal repairs”.

“That is a very different approach to that taken by previous generations of buyers, by far the majority of whom would always be on the lookout for the home that was in the best condition and needed the least amount of work when they moved in.”

Also very different, he notes, is what Millennials want to find or put inside the homes they buy, starting with technologies such as smart-phone-controlled temperature, sound and security systems, and an efficient use of space.

“Millennials lead very technology-driven lives, so they expect an increasingly high level of home automation, and most will also not regard ‘green’ features like additional insulation, energy-efficient windows and appliances, solar panels, rain tanks and natural or recycled building materials as anything really special.”

When it comes to the floorplan, Clarke says, several surveys by major building companies have shown that Millennial buyers prefer homes with an open layout to facilitate entertaining, and outdoor spaces like patios, decks and large balconies to extend their living areas.

“However, many of them also work from home, so home offices are rapidly becoming a must-have as well. Millennial buyers also need plenty of storage space for gadgets and sports equipment, and they like homes with a spare room that can become a home gym, library or games room just as easily as it can become a guest bedroom”.

“And finally, the research also shows that they generally prefer neutral colours and clean architectural lines that won’t date, lots of light and very durable, unfussy finishes.”