Housing the millennials

SINGAPORE (Dec 4): Understanding the Gen Y mindset is crucial to riding the next wave of property sales.

From selfie-taking to social media-(over)sharing, millennials may be famous for many traits, but not for one characteristic: compared to the Generation Xers that precede them, their love for snapping photos may be real, but their propensity for snapping up new homes trails behind.

A recent survey by CBRE found that 63% of the members of the generation born during the early 1980s and mid-1990s are not leaving the warmth of their parents’ homes. And of those who have fled the roost, over 60% did not buy a nest of their own, but are instead living in rented accommodation.
 
The reason: the high financial burden of purchasing a property. According to HSBC’s recent global survey, 69% of young adults aged between 18 and 35 said that the biggest hurdle to home ownership was saving enough for a deposit while 64% cited the need for a higher salary.
 
However, in Singapore at least, it seems that millennials have strong aspirations to buy a home. In the same survey by HSBC, 83% of millennials who did not own a home indicated that they intend to purchase one in the next five years, reflecting the nation’s high regard for home ownership, where nine out of 10 residents are homeowners. Buying a home is also viewed as a necessity for young couples starting a family.
 
Based on trends reported by The Straits Times this year, property prices for both private housing and public resale units in Singapore have also fallen from their peak in 2013 while salaries have continued to rise, whereas salaries have stagnated in many other countries globally since the last financial crisis.
 
At the same time, “Generation Y”, as they are also known, comprise roughly a quarter of the total workforce in the Asia Pacific region. They are rapidly forming a formidable source of spending power and will soon be the new keystone of our economy.
 
Catering to the Singapore millennials 
For these reasons, property developers are increasingly paying attention to millennials, who are – or will be – making up much of a new client base, and have started aligning developments with their perceived interests and preferences.

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