Young adults still living with parents drive luxury boom
YOUNG people are driving a boom for luxury goods because record numbers of them still live with their parents, according to Morgan Stanley.
Analysts at the investment bank said lower rent and grocery bills meant many had the spare cash to splash out on luxury items.
It highlighted that around 42pc of young people in the UK aged under 34 still lived at home with their parents, with men staying longer in the family home than women.
This is the highest share since records began in 1996, when the share was 36pc, according to the Office for National Statistics.
Morgan Stanley noted that “luxury consumers in the West have clearly been getting younger over the past few years’’.
Edouard Aubin, an equity analyst at Morgan Stanley, said this was driven by higher disposable income among young people who were less concerned about soaring energy bills or the mounting cost of living because they lived with their parents.
“When young adults free up their budget for daily necessities, they simply have more disposable income to be allocated to discretionary spending,” said Mr Aubin. “We see it as fundamentally positive for the [luxury] industry.” Morgan Stanley said the trend was similar in the US, where half of all young adults aged between 18 and 29 now live with their parents, according to census data. This is the highest it has been since 1940.
It said the drivers behind people living with their parents for longer were likely to continue. House prices remain elevated, while more young people stay in education longer and fewer marry in their early 20s.
Industry experts believe young people will continue to drive sales among luxury brands in the future.
Last month, US consulting firm Bain claimed the luxury market would be “more resilient to recession than during the 2009 global financial crisis”, driven by a “more precocious attitude towards luxury”. It said millennials and “Gen Z” shoppers born before 2010 accounted “for the entire growth of the market in 2022”.