FROM THE DESK OF THE MD
PUBLISHED 9 MAY 2019
The real estate industry is never static and now it seems that after years of sitting on the sidelines, masses of millennials all over the world are causing a surge in sales by suddenly opting to become homeowners – and we’re hoping that this trend will catch on in SA too after this month’s General Election, because this is the generation that has the numbers to really start driving the market forward again.
Millennials, or people currently aged between 23 and about 38, are the biggest population cohort in most countries since the Baby Boomers, and they are just as apt to break the rules and do things differently. For example, they have tended to be very late bloomers when it comes to property ownership, and pushed the average age of first-time buyers all the way up to 34 from 24 over the past 20 years. To a large extent, they have also tended to eschew the suburbs and favour life in the inner cities.
Now, however, those patterns appear to be shifting again. In a recent survey of prospective home owners by Clever Real Estate, all the millennial respondents said they were intending to buy within 12 months.
Meanwhile the latest Bank of America survey of existing millennial owners showed that most believed that buying a home instead of renting one would have a positive effect on their long-term finances. It also found that 86% of these owners believed home ownership to be more affordable than renting.
And affordability is a major concern for most millennials. In fact, the Clever survey found that 68% of respondents wouldn’t mind buying a fixer-upper that would take them years to revamp as long as this helped them keep the costs of home ownership down. Millennials are also much more likely than previous generations to become landlords right away (52%) by buying multiple apartments or homes with flats and cottages that they can let out in order to generate income that they can put towards repairs or repaying their own bonds.
In addition, millennials are different from the earlier generation of buyers (Gen X) in that they are not as technology dependent. Indeed, they appear to be actively looking for human estate agents to guide them through home buying process.
Of course they are still using the internet to locate homes they like and might want to buy, the Bank of America report says. “However, since most are new to the housing market, they don’t know how the process works or what to expect and need someone they feel they can trust to help them achieve an optimal outcome.”
In addition, many are realizing the value of professional rental managers when it comes to identifying quality tenants, keeping maintenance and repair costs down and evicting tenants who start defaulting.
This is of course good news for the traditional real estate industry – but at RealNet we know it doesn’t mean that we can sit back and stop innovating. We must and we will continue to make use of all relevant technologies to provide better service and make ourselves even more indispensable to the coming generations of home buyers.