At the moment, millennials constitute a majority of the world’s workforce and the consumer economy is slowly adapting to their needs and wishes. Companies from various industries are reshaping their offers so they can target this consumer group more efficiently. On real estate market, these changes are much more obvious, due to high margins and capital gains. Currently, many millennials are searching for their first home and they are a 33% of worldwide homebuyers. Some real estate companies are still trying to recognize and decipher the expectations of millennial buyers. In this article, we’ve shared our observations on the fast-changing real estate market that is finally entering its millennial phase.
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Widespread gentrification is probably the best known millennial real estate trend. They want to live in cultural and social hubs. They want a home that’s within walking distance from all major cultural venues. That’s why Millennial homebuyers are massively moving to the newly-gentrified city areas. Peaceful suburbia and idyllic country homes are not as nearly as attractive to them as the hipster neighbourhoods of London, Berlin, New York and Sydney. Neighbourhoods like Dalston, Kreuzberg, Brooklyn and Camperdown have become a crossover between the upscale residential districts and the vibrant cultural hubs, like Haight-Ashbury in the sixties’ San Francisco.
Real estate experts argue about the origin of the growing renting trend. Some of them think that homebuyers are avoiding mortgage loans because of bad experiences during the 2008 Economic crisis, while others think that millennials simply don’t perceive the life fulfilment in the same way as their parents. The reason for such a high number of subtenants among the Millennial crowd is probably the mix of both of these two theories. Millennials don’t want to tie themselves to one place for the next ten or twenty years. Even the young married couples with kids would rather spend their savings on travels and various other life experiences than on purchasing expensive properties. It’s the individualism that shapes Millennials’ attitudes towards the real estate ownership, they are also aware of the mistakes their older peers made when they bought homes they weren’t able to afford.
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Millennials are also called the digital generation. They are accustomed to using web tools in order to find the best commercial deals. The habits of this cohort will completely change the real estate marketing and sales. Most real estate agents already use websites and social networks as the main tools for promoting their offers. They also use various marketplace platforms. Representatives of Lifull real estate listing from Australia told us that the number of real estate ads on their platform has doubled during the last year. Millennial buyers will also gladly accept the new forms of real estate presentation and advertising. In the future, we can expect that the latest virtual and augmented reality technologies will be used to create incredibly realistic presentations of properties for sale.
Death of the mall culture
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The fast growth of the eCommerce business model and the widespread contempt millennials show towards the overly-promotional sales people, will hammer the final nail into the ‘mall culture’ coffin. The widespread demise of the malls across the United States and Europe has started with the highly cynical Mallrats movie. Today, the sales of huge commercial properties in suburbia are declining and it will soon be replaced with the sophisticated residential-commercial and cultural hubs with lots greenery and places for socializing. So, the big, grey, prefabricated commercial buildings are finally becoming just a bad memory and in my opinion, this is the best change millennials have brought to the urbanization of the cities across the Western hemisphere. Unfortunately, in the developing countries, the mall shopping culture is still in its full swing.
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The number of sustainable communities has already been established throughout the United States and we are still waiting for the European millennials to follow this trend. These people are living off the grid in the self-sufficient villages and communes, while leaving the lowest possible carbon footprint. At the moment, millennials are known as the most ecologically aware generation. Their environment orientation will probably plant the seed for a completely different type of future housing.