Accounting for almost 30% of the country’s total population and representing the largest portion of its workforce (51%), it is no wonder that people born between 1981 and 1996, known as Millennials or Generation-Y, now play a major role in shaping the property landscape.
Figures show that more than 300 000 South African millennials purchased property between 2015 and 2017 of which a third were first time homeowners – suggesting that this category wields significant buying power. It is that very clout that we see impacting current property development trends.
Address and community living matter most
Urban property development firm, Blok, recently conducted research to better understand what potential property investors are looking for and importantly, what influences their purchasing decisions. With 63% of the respondents between the ages of 26 and 36, the survey revealed some interesting insights into the millennial market.
Jacques van Embden, Managing Director at Blok, comments, “We saw that most millennials prioritised living in a good neighbourhood with easy access to lifestyle centres, restaurants and shops.”
This does not appear to be unique to South Africa, but rather a global trend. According to The Chicago Business Journal, it is important that real estate developers construct “neighbourhoods” that are centred around the idea of community, focusing on principles such as accessibility, affordability and aesthetics.
“Hipsturbia” on the rise
What is important is proximity. One report released by Urban Land Institute and PwC made mention of a new trend dubbed ‘Hipsturbia’, which refers to a rise in denser, mixed-use neighbourhoods in suburbs located near to metros which have become vibrant live, work and play districts.
“We’re seeing a trend of ‘living outside the home’, where millennials seek the lifestyle benefits a certain area affords over a larger private space,” says Jacques.
The study also notes that mincreasingly, millennials are settling down later in life and having fewer children than previous generations, making the size of their homes less important.
Another somewhat more pragmatic reason why millennials are increasingly opting for a smaller private space is because they’re concerned about affordability – they have to be.
As one of the most indebted generations – and with the pandemic compounding existing financial woes – price is a key factor influencing where they choose to live.
Fifty-six percent of respondents in Blok’s survey earned between R15 000 to R25 000 per month, which naturally weights the current living circumstances of those surveyed towards renting rather than owning.
“This is not because they don’t want to own property, says Jacques, “but rather because millennials want to invest in a modern space with new furnishings – and there is little available within their price range that fits the bill.”
The vast majority of respondents also indicated that they could only afford property with a maximum price threshold of R750 000.
“Developers are waking up to this inherent price-consciousness and we’re increasingly seeing more compact homes (20m²), which tick the box on affordability while offering the buyer added value in the form of shared features such as communal spaces in the building that are available to all tenants,” adds Jacques.
Agility and freedom
The survey showed that millennials also value being able to lock-up-and-go when a travel or work opportunity arises.
“For this lifestyle, they need a home that allows them the freedom and as a result, developers are designing more agile products that adapt to market movements, marrying shared spaces with a service offering,” notes Jacques.
These factors are the inspiration behind Blok’s latest development, SIX ON N.
The 87-apartment development – located on the prestigious Norfolk Road in Sea Point – boasts a number of exciting features. These include an on-site deli, communal boardrooms, a rooftop deck with pool, fitness studio, as well as an integrated workstation in each apartment, aptly demonstrating the value millennial buyers place on investment security, convenience and lifestyle.
For more information, visit www.blok.co.za
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