More Australian millennials are expected to break into the property market in the next few years, taking advantage of a sector hampered by the coronavirus crisis, a recent ING homeownership report has revealed.
But according to the study, these savvy millennials are more interested in owning a home than buying an investment property as current economic conditions have made homeownership more achievable. However, this age group is also known to be very particular on what they want, so it would benefit investors to pay attention to their housing preferences.
Why should investors target millennials?
Millennials are poised to become Australia’s largest age group by the decades’ end, accounting for more than half of the country’s population. On top of that, a recent Suncorp report revealed that members of the millennial generation are Australia’s best savers, making them an ideal market for investment properties.
“Many in this age group are likely to be enjoying an increase in their income as they finish university or build their career, while still having the flexibility of fewer big financial commitments – a strength which generally stops as you get older,” says Chris Fleming, executive general manager for consumer banking at Suncorp.
Fleming adds that because most millennials are often motivated by tangible goals, such as buying their first home, they have the potential to be major drivers in the industry.
Top things millennials want in a home
However, this generation is also driven by creativity and a desire to make the world a better place to live in, so it is important for homes to include features that suit these needs, says Rachael Poole, general manager of Home and Lifestyle at Allianz.
“As this generation gradually begins to make up a larger percentage of the housing market, it’s important to consider the types of forward-thinking innovations you can install in your home to ensure your property is one that will be considered by our younger generations,” she says.
Here are four things millennials look for in a home:
According to Poole, sustainability will be a “driving force” for younger generations, including millennials, in choosing a home.
“Millennials and Gen Z’s are intrinsically a climate conscious group of people. They’ve lived through natural disasters, COVID-19, an endless real estate bubble, and recurrent economic crises, which act as driving forces to making a shift,” Poole says. “This younger generation will play a crucial role in pioneering and instilling sustainability practices within the home.”
Poole says houses designed to reduce energy and water consumption, and those built using eco-friendly materials are attractive options for these ecologically conscious buyers.
Coronavirus restrictions have drastically altered not just the way people work, but also how they approach leisure time, and months of pandemic-induced isolation has amplified the value of staying connected.
Many millennials are expected to spend more time at home, either for work or doing their hobbies, even post-pandemic. And for many of them looking for a home, access to reliable internet and mobile phone reception is essential.
3. Good location
Convenience is another factor that millennials prioritise when choosing for a place to settle. Some members of the age group are also keen on limiting car use to reduce their carbon footprint, so being a short walk or commute away from basic services, family, and friends is important.
Many millennials now see homes not just as a place to rest and retreat but as “lifestyle hubs” for a range of different activities, especially with what happened during the pandemic, says Julie-Anne Bosich, head of mortgages at ING.
“COVID-19 has fundamentally changed the way we live our everyday lives. Lockdown taught us to work, exercise, entertain, learn, and parent all under the one roof. It’s turned our humble homes into essential multi-purpose lifestyle hubs,” she says.
Millennials will be looking for homes with multifunctional spaces to allow them to do various activities. An area to accommodate and entertain friends could also be an essential add-on.