Gen-Y buyers will create next property wave

The South African real estate industry should sit up and take notice of ‘Generation Y’ because that’s where the next big burst of property market growth will come from.

Gerhard Kotzé, CEO of the ERA South Africa property group, says Generation Y – made up of consumers currently aged between 18 and about 30 - is attracting the attention of marketers worldwide, and will arguably supplant in importance the Baby Boomers born between 1946 and 1964.

“That generation has been most responsible for driving consumer demand and economic growth since the 1960s but now the view among researchers and economists is that their time is past and ‘Gen-Y’ buyers will be the new driving force.

“New research in the US, for example, shows that buyers in this demographic group are more likely to purchase a home in the medium term than those in any other age group – making them the most important target market for estate agents and home sellers.”

The research, much of which is likely to resonate in SA, also revealed that 52% of the Gen-Y respondents thought a home was a better financial investment than stocks. In addition it showed that 36% of Gen-Y buyers were likely to find a home through an estate agent, 35% on the Internet and only 5% through a home builder or other agent.

“Obviously the Internet plays a huge role in the lives of Gen-Y consumers,” says Kotzé. “People in this age group have been familiar with computers since childhood and many have grown up with the Internet, which is thus an essential medium for those marketing to Gen-Y homebuyers. According to the research four out of 10 read blogs or use social networking websites at least a few times a week.”

Indeed, it was found that Gen-Y buyers are more likely than any other age group to frequently use the Internet when starting to search for a home to buy. And they are the most likely to take action from Internet searches – with 76% deciding to drive by or view at least one home seen online.

Kotzé says it is also interesting that the most likely reason for a Gen-Y buyer to purchase a home is the desire to own a home and establish a household (62%) – and that while Gen-Y buyers are concerned about affordability, they are equally interested in the quality of the areas they choose to live in and their proximity to work.

“This relates closely to trends we see beginning to emerge in SA, such as the renewed interest in inner suburbs with established amenities as well as the hankering after a simpler lifestyle in smaller towns.

“In addition, many of the new middle class – the so-called black diamonds – in SA fall into the Gen-Y age group, so I have no doubt that this segment holds the key to our next market upturn.”

Article by: www.era.co.za