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An increasing number of Australian millennials are expected to break into the property market in the next few years, thanks to record-low interest rates and a spate of government grants meant to support first-time buyers, according to a recent ING homeownership report.
The study also revealed that many of these savvy millennials are more interested in owning a home than buying an investment property as current economic conditions have made homeownership more achievable.
Members of this age group, however, are also known to be very particular about what they want, so it would be beneficial for real estate agents and property investors to pay attention to this age bracket’s housing preferences.
Why should investors target millennials?
Millennials are poised to become Australia’s largest age group by the decade’s end, accounting for more than half of the country’s population. On top of that, a recent Suncorp survey has found that members of the millennial generation are among the country’s best savers, making them an ideal market for 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,” said Chris Fleming, Suncorp executive general manager for consumer banking.
Fleming added that because most millennials are often motivated by tangible goals – including buying their first home – they possess the potential to be major drivers in the real estate industry.
What are the top things that 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, said 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 said.
Here are some of the things most millennials prioritise in a home:
1. Eco-friendly living
Sustainability will be a “driving force” for younger generations, including millennials, in choosing a home, according to Poole.
“Millennials and Gen Zs 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,” she said. “This younger generation will play a crucial role in pioneering and instilling sustainability practices within the home.”
Poole added that 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 continue to spend more time at home, either for work or doing their hobbies, even after pandemic restrictions have been lifted – and for many of them who are looking for a home, access to reliable internet and mobile phone reception is essential.
3. Prime location
Convenience is another factor that millennials prioritise when choosing 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 crucial.
4. Multifunctional spaces
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, said 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 said.
Bosich added that as millennials search for homes with multifunctional spaces to allow them to do various activities, an area to accommodate and entertain friends should also be an essential feature.