Young professionals are changing the housing market
MAIN IMAGAE: Lanice Steward, head of training for Pam Golding Properties, Grant Smee, property investor; Xoliswa Tini, principal Xoliswa Tini Properties; Catherine de Villiers, rental consultant Jawitz Properties Johannesburg North.
Signing up for a bond and making a purchase on a sizable house in the suburbs is no longer considered an entry into adulthood. As young professionals migrate to urban hubs and city centres, many of these millennials are choosing to live a simpler life.
Affordability is a challenge
Affordability is a major challenge for most young people wanting to get into the property market. According to a recent Lightstone Property report millennials could pay up to three times more for their first home than the generation before them.
Most young couples, with more living together without getting married, are renting today says Lanice Steward, head of training for Pam Golding Properties. The average age of young people buying is about 32-35 years with few 20 year-olds buying unless they are assisted financially by family.
“The change between renting and buying would be a question of affordability. Even with the banks’ lending 100%, often the price of property where people want to live is out of reach for a lot of young couples,” explains Steward.
A generation on the move
This is also a generation that enjoys to travel and see the world – for many of them a higher priority than being tied down to the responsibility of making monthly mortgage payments and keeping up with maintenance expenditures, even if they can afford to buy a home.
According to the 2019 Deloitte Global Millennial Survey, 57% of the people surveyed said that travel and seeing the world was at the top of their priority list while less than half said they wanted to be homeowners. “Many nomadic professionals have embraced co-working in rental office spaces and the concept of co-living and sharing has quickly evolved from this. This form of living and working has made it possible for people to travel, live and work in a way that is more affordable,” says Grant Smee, entrepreneur and property investor.
“Agents should realise that to the young people simplicity is the driver of their buying life, they do not want any complications as they plan their lives to live anywhere on the globe,” says Xoliswa Tini, principal of Xoliswa Tini Properties.
Tini says research has proven that millennials prefer to rent close to where they work. “We now see more developments which are designed for ‘stay, work and play’. Lifestyle has changed as compared to many years ago. Technology has simplified everything. Children no longer play in the streets and big yards – it all happens in the tips of their fingers, school yards or communal parks. No one wants the stress of maintaining gardens. The smaller the living space the better,” she says.
Smee agrees that young professionals are driving the affordable housing market nationwide, and due to their preference for ‘lock-up-and-go’ units, they are the property developers dream.
Catherine de Villiers, rental consultant at Jawitz Properties Johannesburg North, says in Johannesburg there is an increased demand for rental properties in Sandton and within a 10 km surrounds, which mainly encompasses Johannesburg’s more exclusive suburbs. “Complexes, whether it be a cluster, townhouse or apartment complex with 24-hour security, are typically more in demand,” she says.
Boom in mixed-use developments
When choosing a place to live – a key consideration is ease of access to the workplace, shops, schools and recreational facilities. A requirement that has seen a global rise in mixed-use or multi-purpose housing developments. South Africa is also seeing a boom in mixed-use precincts, particularly in the bigger metro’s Cape Town and Johannesburg but also in smaller cities like Durban and Port Elizabeth.
These developments are proving to be popular both with millennial homebuyers and older affluent persons looking to scale down.
“With the rapid expansion in urban centers, new solutions bring rise to space-saving building concepts. City planners are no longer able to design a stand-alone office or residential building which makes multi-purpose developments a welcomed solution,” says Smee.
People living in multi-purpose developments have everything they need within walking distance. These developments provide residents living areas that are integrated with their work, home, shopping, transportation and green spaces.
Take for example the HOMii Lifestyle multi-purpose developments. They recently launched a fully-fledged multi-purpose development in Fox Street, Johannesburg and is currently completing a building in Dr Pixley Kaseme (West) Street in Durban. They also own precincts in Cape Town.
These multi-purpose housing developments offer tenants everything from free WiFi to shared co-working spaces, leisure areas and laundry services.
HOMii Lifestyle offers tenants free WiFi, access control with facial recognition, co-working spaces, chill out areas and laundry facilities.
How to communicate with tech-savvy millennials
The younger generation tenants are definitely more tech-savvy and communicate in a new way, says De Villiers. They operate mainly on the internet and aren’t looking through the traditional newspaper adverts for rental properties. They generally use a variety of property portals to find rental properties and send links of the homes they would like to see to the agent.
De Villiers says young couples often use social media platforms like Facebook, and sometimes Instagram, to stay abreast with property news and available properties.
There is also a definite preference among the younger generation to communicate via WhatsApp. “WhatsApp is a very immediate way of keeping clients updated and communicating in real time about the intricacies involved in finding a great property to rent. You can also see if messages have been delivered and read, which puts more pressure on agents for a more immediate response,” continues De Villiers.
Steward adds that while true that younger people in many instances prefer to be communicated with online, using WhatsApp and emails, a good agent should not underestimate the role they play in giving the first-time buyer the necessary guidance and confidence to buy. “This is often achieved by building a relationship of trust which is not easy to obtain through WhatsApp!”