Report: Millennials to shape real estate market trends
Raised during the recent economic boom in China, millennials represent a rapidly growing source of labor and consumption and are set to reshape the future trends in China’s property market with their new lifestyle preferences, according to new survey results by property consulting firm CBRE.
CBRE projected that the way millennials live, work and play will also have a profound influence on economics, opinions on workplace design and functionality, and drive new attitudes towards consumption and experience for the foreseeable future. The global survey polled 13,000 millennials aged between 22 and 29, including 1,000 from the Chinese mainland.
According to the report titled Millennials: Shaping the Future of Real Estate, as many as 61 percent of China’s millennials are still living with their families due to cultural norms and high property prices. However, almost half (48 percent) of them intend to move out within two years, a ratio is that markedly higher than those in the other nations and regions in the Asia-Pacific.
In addition, 57 percent of Chinese respondents have expressed a strong desire to buy properties in the future regardless of whether they are currently living with parents or renting a home.
The report also found that parental support in home purchases have been indispensable in the current property climate, with more than two-thirds of respondents saying that they had received financial help from parents.
Among respondents in the AsiaPacific, millennials in China and India displayed the strongest intentions to buy their own property in the near future. In China, stability was cited as the main reason to buy a home, and usually involves two sets of parents funding the down payment on a home for a newly married couple.
“The report showed that up to 80 percent of Chinese millennials have the same belief as their parents — that home ownership is very important to an individual. However, they are also more tolerant than their parents when it comes to renting a home should they not be able to afford buying one,” said Xie Chen, head of CBRE research China.
“While many millennials in China are currently choosing to rent after moving out of their parents’ homes as the property prices are too high, they do aspire to own a house. Developers and city administrators should take heed of these trends and construct more affordable housing for rental and sale. Small, modern and practical units with good amenities and accessibility would be ideal for millennials,” said Xie.
Xie added that millennials’ penchant for high-quality facilities and experiences will in turn drive demand for long term rentals of white-collar apartments for singles.
In terms of the impact on office spaces, 81 percent of survey respondents indicated that high-quality office design and layout will have a positive impact on their working experience. They also underlined the need for work-life balance and personal well-being. The survey suggested that companies should strive to create a physical workplace environment that meets these demands so that their millennial employees can be productive and motivated.
The survey found that Chinese millennials are willing to increase discretionary spending, particularly on leisure activities, and eat out an average of 5.9 days per month. Twenty-five percent of the respondents indicated that being able to “see and feel the products” is the primary reason for shopping in physical stores. As such, brickand-mortar stores, in particular shopping centers, that provide new experiences and a conducive environment for socializing are considered irreplaceable.
In order to tap into this trend, the survey suggested that retailers adjust their offerings accordingly.
Xie Chen, head of CBRE research China