There is a new group of property buyers and it definitely is worth understanding them. After all, the millennial generation, which refers to those born between 1981 and 1996, is a significant demographic shaping the property market today.
Making up the bulk of the active workforce and driving the economy, they are the new homebuyers in town, with a set of habits and preferences different from their parents – the baby boomer generation.
From fingertip to doorstep. Convenience is paramount for millennials, who are usually digital natives immersed in social media and e-commerce. They are used to making purchases with just a touch of a button in the comfort of their living room, stocking up on groceries, ordering food and now, buying houses. It is an onscreen experience but satiates the senses, as new virtual reality technology and nifty house tour videos draw the eyeballs. This means consumers can view uncompleted projects, even getting a glimpse of the scenery from a particular unit. As millennials settle into their couches to binge on Netflix serials, toggling to view YouTube showflat tours comes as second nature.
Marketing collateral is also going into cyberspace, as traditional paper flyers or pamphlets are increasingly digitalised. More importantly, electronic payment and administrative documents are available online, which means the hassle of meeting in person to sign papers will be done away with.
Sure, many still prefer to have physical viewings for a big-ticket item like a home, but the Covid-19 pandemic has definitely instituted new norms. It has popularised virtual viewings as physical visits are limited, and millennials are increasingly receptive to the idea of purchasing a home online.
They want the experience first before paying. Whether it’s Spotify, LinkedIn or Dropbox, businesses are now recognising that millennials have to be “hooked” by a positive trial experience before they commit any cash to a product. This is also known as the “freemium” model, where consumers try a basic version, usually for free, before paying a premium for additional features.
How does this apply to buying homes? Many developers are now offering Deferred Payment Schemes or “stay then pay” schemes that allow just an initial down payment to live in a home. It is only after a specified period of one to three years has elapsed that the owner begins footing the rest of the bill. This allows millennials to secure a home while giving them time to save.
Special leasing schemes have also been launched, for example in private condominium Lloyd SixtyFive, to enable the buyer to pay an upfront amount as rent for a specified leasing period, after which the buyer has a choice to either purchase the unit or forgo it. This is a sign of the times: As the young have access to a plethora of choices in daily life, be it in food or fashion, even the property sector has to constantly provide more options to cater to them.
They want community – think collaborating, co-creating, co-sharing. These are buzzwords among a risk-taking generation which is entrepreneurial and aspirational. Add co-living into the mix. It harmonises hostel living with apartment lifestyle where residents may share communal living rooms, toilets, kitchens and lounges. While some may consider it elevated dormitory living, millennials buy in for a vibrant, activity-filled community in a collegial atmosphere. In particular, it may appeal to start-up employees, expatriates, entrepreneurs and travellers who are looking for co-working and social spaces for networking opportunities.
Several co-living properties have already sprouted in Singapore, such as The Ascott’s lyf at Funan Mall, and Hmlet’s properties at Joo Chiat and Shenton Way. In Thailand, under the Sansiri's XT brand, residents can access to the co-sharing facilities of other condominiums in the XT series, which will in turn fuel collaborative opportunities. The co-sharing facilities at XT-branded condominiums include spaces for co-working, co-playing and co-creating, photo studio, cooking studio, as well as crafts and arts studio.
When one think of millennials, stereotypes of a lavish lifestyle filled with yoga classes, cafe-hopping and Instagram-worthy holidays come to mind. This may be true, but many millennials are in fact also financially-savvy with long-term goals. According to an HSBC Global Survey in 2018, 43 percent of Singaporean millennials intend to own multiple homes, with 74 percent looking to use their second home for investment purposes. It also highlighted that millennials are focused on “future proofing and investing”. Moreover, the survey showed that millennials in the Republic are also quick savers, taking an average of five years to save for a deposit for their homes, outperforming the baby boomer generation and Gen X-ers who took six and seven years respectively.
No doubt, millennials are taking the property market by storm, whether you like it or not. The new buyers are in town and are making themselves right at home.