IN A FEW YEARS’ TIME, millennials will make up over 40 per cent of buyers in Australia. And with an insatiable thirst for the sensational in all aspects of life, they are no different when it comes to the properties they hope to buy – and their method of buying. Chloe Taylor uncovers what millennial buyers expect in a home, and in their real estate agent.
The dynamic group of people labelled as millennials (aged 18–34 – also known as Generation Y) has been slow to enter the real estate market, but now that they have, it seems that nothing will be the same again.
It is estimated that the number of millennials in Australia has exceeded four million, accounting for one fifth of the total population. What’s more, their spending power is considerable, and the need to acquire a new, sensational lifestyle is insatiable. In a few years’ time, millennials will comprise over 40 per cent of buyers in Australia. Hence, they are expected to shape the real estate market trends in 2016 and beyond, and spark much attention in property circles.
Millennials endorse distinctive purchasing habits and have a different mindset from their parents. Thus, home sellers, real estate agents and others prospecting in this market must make an effort to stay on top of the wants and needs of this group.
AT THE SUMMIT OF SUCCESS
For millennials, owning a property is a top priority. Yet affordability is one of the prime concerns: some millennials have managed to leapfrog into investment property ownership, scoping out the market vigilantly, while others have not been so lucky. Still, both groups aspire to obtain financial freedom and fulfil the Australian dream.
Now, 67 per cent of millennial members are first-time home buyers, who are wanting to own a home. The problem is that they are often reluctant to pay good money, as the majority of millennials have gone through the frugal renting period in life. In such a situation, a short-term rental could do the trick of gradually persuading them that the specific property is nothing short of a perfect buying choice.
A MATTER OF LIFESTYLE
Like most other generations, millennials want to eventually settle down. One of the primary motivations for the millennial in owning their own slice of real estate is the ability to infuse their own personality into the property.
This has several implications for real estate agents and vendors. First of all, homes that do not allow millennials to inject their personality and style into the space will fly under their radar. They are keeping their eyes open for places that will serve as a rewarding stage for renovating endeavours, ones that can be later sold for a profit.
FOR A PRICE
As we have pointed out, the price tag is always important. Many younger buyers are burdened by personal loans or credit card debt, experience difficulties in being accepted for a mortgage, and are plagued by obstacles like saving for a deposit and having poor credit ratings. The ratio of median prices to average salaries is also something that pushes millennials towards lease.
Furthermore, they do not shy away from purchasing previously-owned property, which is seen as a way to mitigate the impact on the budget. Now, although the new living environment can be as old as the hills (and ideally reasonably priced), there is a thin red line: its interior must not be outdated and unfit for the high-tech age of today.
The neighbourhood plays a crucial role in millennials’ decision-making process. To be more precise, millennials are more partial to places near their jobs and ones that involve lower commuting costs.
Interestingly enough, they also prefer to stay within 20 kilometres of their previous residence. To some extent, these factors may even overshadow things like cost and condition of the home. As for the place itself, the millennial is intrigued by contemporary design, sleek interiors, functional outline and an aura of authenticity.
THE ESSENTIALS LIST
In concrete terms, there are some must-haves no agent should dare to overlook. Younger, budget-conscious buyers will pay attention to the kitchen and bathroom, giving preference to rooms that have been upgraded with water-saving fixtures. When it comes to the kitchen, bigger is better, with an open floor plan stealing the show. Also, note that a substantial portion of millennials work at home, making home offices a desirable asset.
One thing they steer clear of is an interior with high maintenance requirements, which means they prefer wooden floors over carpet, and adore granite countertops, as they are associated with both the visual appeal and low-upkeep. Energy efficiency is another key aspect for millennials, who are put off by clunky, energy-wasting appliances, shabby HVAC systems and poor insulation.
Tech-savvy as they are, millennials still want agents to explain to them market trends, and guide them through the labyrinth of negotiations. When hiring a professional, they mostly rely on referrals from friends and family, and are not keen on weighing multiple options. That being said, they are no strangers to conducting extensive research in order to assess the reputation of the real estate agent.
Therefore, those seeking to procure millennial clients must maintain an updated, appealing website with content such as customer reviews and recommendations. Valuing transparency, human touch and honesty above all else, millennials will not put up with shady and rigid agents.
GO WITH THE FLOW
Under the influence of the trends mentioned above, the real estate landscape is shifting. Millennials feel at home when using online listing and mobile apps, and are fond of email and text message communication. On average, they spend three hours per day on social media, and are 247 per cent more likely to be influenced by blog and social posts than their predecessors.
Time-saving features and ease of access to information are in the spotlight. On-demand scheduling via apps and online property tours will grow in importance and pave the path to the future of the industry. One thing is for certain: making a good first impression and maintaining the loyalty over a longer period of time is the best way for agents to prosper in the busy market of today.
JUMP AT THE OPPORTUNITY
Being a large segment of the buyer population in Australia, millennials are a potent force in the market. Agents must do everything within their power to maximise the appeal and effectiveness of a property and infuse it with the features millennials are in the market for.
So, stay up to date with the latest tech marvels, and make your business social-proof and future-ready. By accomplishing this, entrepreneurial agents can build long-term trust and move up the career ladder.