Economists are predicting another tough year ahead as political uncertainty and a flat economy continue into 2017, further squeezing an increasingly subdued property market and shrinking investor pool.
However, while realistically priced homes in most areas will always eventually find a buyer, savvy sellers are realising that in order to gain the edge in a competitive buyer’s market it is essential to be cognisant of emergent trends and shifting buyer needs.
Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty says: “Investors in the 35 to 49 age group are still driving the residential market in the majority of suburbs in South African metros, but the reality is that in a few short years, the next generation will be in the driver’s seat and they are nothing like their predecessors.
“Millennials (consumers under the age of 35) not only account for almost 30% of the population, they are also the most diverse, educated and digital generation ever to live and their unique set of needs, expectations and values are already precipitating trends in the real estate sector.”
Lightstone reports for 2016 clearly demonstrate that this emergent market is already catching up to the dominant investor demographic in many areas, while in some suburbs they have already become the highest percentage of recent buyers.
Geffen says: “It is therefore vital that sellers in the current market think ahead and bridge the gaping generation gap to make their homes as appealing as possible to millennial buyers who are at the forefront of new and fast-changing global property and lifestyle trends.”
In order to do so, it’s important to understand how their lifestyles differ from those of investors who were born before 1985, what their priorities are and how this impacts their decisions when choosing a home.
Recent surveys by companies like Deloitte and Eco-consultancy in the UK have revealed that flexibility is held in high regard by millennials, with almost 70% of all graduates believing that freelancing is a more attractive option that the security of long term employment.
While this does also indicate a growing number of consumers who prefer to rent, it’s a clear indication of the type of property and features that will appeal most to millennial buyers and the prominent watchwords are: convenience, low maintenance and lock-up-and-go.
Low-upkeep features such as wooden or bamboo floors (as opposed to carpets), granite countertops and compact outdoor areas with indigenous plants are sought-after as they’re both attractive and relatively hassle-free.
Many of these home buyers grew up watching their parents spend weekends working through to-do lists and mowing expansive lawns and millennials prefer to have their weekends to themselves.
Open plan living areas
Younger buyers usually prefer an open floor plan, rather than a layout that compartmentalizes the home. This is largely influenced by how these often single homeowners entertain and they want people to flow through the home during gatherings, rather than be sectioned off in rooms.
Smart home/high tech features
This is the first generation to never have known what life is like without the constant connectivity of cell phones and the internet so they will ask about connectivity and reception and you need to have answers. Firstly, where available, fibre connectivity is a must. And, with almost every aspect of their lives utterly immersed in technology, features like smart home automation which linked gadgets and devices will be a strong drawcard. Sellers needn’t spend a fortune modernising an older home, but adding one or two high-tech features will definitely add to its appeal. It’s also an important factor to bear in mind if rewiring is needed.
Millennials are also far more concerned about environmental issues than previous generations and will therefore generally find homes with eco-friendly and energy-efficient features more appealing. Grey water recycling systems and solar-powered water heaters are popular devices and this investor group is also most likely to notice and appreciate design principals to reduce lighting, heating and cooling needs. These include shutters, awnings or screens to cool rooms by keeping the hot sun out during summer, skylights to allow natural light into the house and concrete flooring which efficiently regulates temperature and for which there are a multitude of beautiful finishes. These buyers also prefer natural, sustainable building materials.
The majority of millennials live alone, and are therefore often extremely safety and security conscious when selecting a home. Homes in safe neighbourhoods with comparatively low crime rates which have good security features like strong locks and secure windows and doors will always have the edge over other properties, especially those which are access-controlled.
Apartment complexes with amenities such as laundries, gyms and pools are very appealing to a generation that is used to convenience and having almost everything, including information, at their fingertips. It’s also cost-efficient as the cost of each individual amenity would be much higher if not included in the purchase.
Although there is nothing that sellers can do about the location of their property, few millennials would consider living too far from the city, preferring easy access to multiple amenities and entertainment options. They also prefer to be in close proximity to their place of work.
Geffen concludes: “Although millennials looking to buy their first home face the mounting challenges of a subdued economy and increased debt, they are also currently the largest generation in the global housing market, and in order to catch their attention it’s important for the industry to truly understand their needs.
“If that means investing a little bit into your property now to make it stand out from the others in your area when it comes time to sell, the return on investment will be more than worth your while.”