Whereas Millennials were mocked and teased for being the ‘lazy generation‘, this vast group of home buyers have now started to enter the property market.
And the results are already showing, as they have begun investing in what they have seemed to shy away from – real estate.
But, they are doing it on their own terms.
What are the reasons for this sudden and completely unexpected trend? There are more than a few, and they are all mutually intertwined, thus giving large motivation to young, new, first-time home buyers.
Here is the millennials’ story:
This is the generation that was growing up in the eighties, and they had just got some sense of money management when the ‘Great Recession’ occurred.
It was a huge shock for the whole world, and we have all suffered from it in one way or another.
What millennials have witnessed during this period has left a huge mark on their understanding of economic stability and money flow, i.e. that every economy is fragile and the stock market can’t be trusted.
Generation Y has seen that you can’t actually rely much on your company after years of hard work, or even your own country. The big players were losing big, and the small ones were disappearing along with their workers made redundant. Banks were going down, and all the shares were dropping.
Ten years have since passed and the world is a very different place. For better or worse, we have weathered the financial storm and the so-called “lazy generation” is now showing signs of turning their own fiscal interests towards securing their future – in the form of real estate.
It traditionally has been, and it will always be, the most reliable form of long-term investing, and millennials have learned to love stability, no matter how restless they may come across.
True, this generation is famous for not staying in one place for too long, but they love the feeling of always being able to come back where they started, which is usually the parents’ home.
What is it then that they are doing with their very own houses and flats, the ones which they themselves have bought?
Well, they are extremely keen on renting. While they don’t like being ‘eternally” indebted to banks, they have no problem renting the place and allowing it to pay for itself. In the meantime, they are still living at their parents’, or co-living with fellow millennial investors.
This is actually an excellent strategy, isn’t it? Considering the fact that so many of them are already saddled with some kind of debt, this is the perfect solution.
They are putting aside their ego and playing it smart. Instead of pretending they have independence by living in a mortgage burdened home, they would rather stay real and live with mum and dad, or a couple of friends. Taking everything into consideration, it does pay off more if you purchase a home and take care of everything in ‘millennial fashion’.
However, millennials aren’t buying only family homes and flats. They are also keen on purchasing vacation properties.
As a matter of fact, one report shows that 2/3s of all millennials are interested in buying a holiday home. While they aren’t using it, they can always rent it to someone else and earn money.
Another reason why millennials are winning this property investment game is that they know which suburbs and areas to look at – those full of interesting facilities or close to business centres.
In addition, Generation Y is perfectly aware that the prices are fluctuating and they are prepared that someday the real estate prices will reach their maximum. Therefore, they are very rational about spending their money. And very well organized and informed, too.
Digital nomads let the real estate pay for itself while they are working and relaxing in another country. Generation Y is sometimes mocked for being constantly online, but they are also very informed and like doing their business quickly and efficiently.
Ditching the traditional brick and mortar establishments, they are able to conduct all their business online, from checking how much money they can borrow to tracking their home loan application, all from the comfort of their living room or cafe, for that matter. A millennial has no time to waste, and we all know time is money.
Finally, getting a passive income is what in this digital world we are all striving for, and that is exactly what millennials are getting through their properties. They have got used to getting revenues from various sources, which should also be the most reliable way to secure an income – we have all seen what happened during the ‘Great Recession’.
Bottom line: Millennials are emerging as the next generation of real estate buyers and property agencies are adjusting to their new customers.
They are bold, self-aware, and know exactly what they want. Travelling the world, saving money on accommodation, while their home is paying for itself in the meantime.
Pretty smart, isn’t it?