Weekend Argus (Saturday Edition)
Property industry must prepare now
Those entering market in a few years will have different needs to previous clients
SOUTH Africa’s adult population of generation Z are either starting or completing tertiary studies, or working in their first jobs, and so are probably living with friends or family, or sharing rented homes.
But in a few years this generation – the born frees – will be looking to buy their first properties and the property industry should start preparing for this, say the experts.
Demographers classify generation Z members as those born between the mid-1990s to the mid-2000s, which would make them aged from 13 to 23.
Marketers – including property agencies – who want to ensure the longevity of their brands and win the consumer of the future, need to come to grips with what generation Z wants and values, says the Institute for Growth for Knowledge (GfK). Its research shows that more than 66% of South Africans are under 35, and 41% are younger than 21.
From a property market perspective, Adrian Goslett, regional director and chief executive of Remax of Southern Africa, says agents have not yet dealt with many generation Z customers. Generally the only interaction has been through its rental services, and via their parents who pay for their student accommodation.
But agents should be taking note of their influence, and thinking ahead to meet their needs. When it comes time for this generation to own property, Goslett says agents are going to have to adapt the way they do business.
“Growing up in the era of Snapchat and 15-second Instagram stories, this generation has even shorter attention spans than millennials. Agents will have to create marketing campaigns that get straight to the point.”
When generation Z enters the property market, Greeff Christie’s International Real Estate sales director Simon Raab says they will probably be looking for affordability and properties such as:
Small apartments.
Low- maintenance, secure homes.
Homes that offer convenience, such as eco-friendly and versatile apartments close to amenities.
Raab says developers can already look head: “Homes are becoming smaller and that is going to suit the needs of these young buyers. There are a number of new developments in central locations like the city centre, Woodstock, Observatory and Claremont.”
Affordable developments will be popular.
“While the finishes would be fairly basic, the homes should be neat and clean. Another must is the homes should be technically up to date and include fibre optic internet connectivity or wi-fi.”
Generation Z individuals also seem to be more fearless, and are willing to take risks and think out the box, says Rawson Property Group managing director Tony Clarke. He believes their property needs will revolve around comfort and location. “They want to be close to family and work as they are able to balance both.”
Considering that this generation is big on digital and smart technology, they will want smart technology home systemssuch as sensored gates, doors, digital door locks, and security systems. High-speed broadband is an “obvious must”. “There could be huge potential for property developers to start building properties with built-in smart features and comfort.”
While 18-year-olds are constantly connected digitally, and seeking new experiences, they are also concerned with the sustainability and future of the planet, says Andrew Golding, chief executive of the Pam Golding Property group.
When they first enter the market many will rent rather than buy, not only because of affordability but also because renting provides a greater flexibility for young people still finding their feet.
“Their first home – rented or purchased – is likely to be a small sectional title apartment in a central urban node close to work, entertainment and leisure activities. So they will probably spend quite a bit of time out of the property – studying, working, socialising, playing sport and even travelling,” Golding says.
Some developers are already catering for this market with micro apartments springing up. These apartments are affordable and accessible.
According to an FNB report, average building sizes have shrunk over the past 50 years, and lower prices are also becoming a trend.