Millennials are more practical than you think
The millennial generation is good at defying traditions. Whether forming a family or carving a career, millennials are known to choose alternative routes whenever possible. Thus, it isn’t surprising that millennials’ views are also different when it comes to money and properties.
Millennials are known for not purchasing or investing in real estate as much as generation X. While most of the baby boomer generation prioritized owning a home in their youth, millennials are more inclined to rent apartments or share with roomies.This can certainly affect the property industry in the near future. Whether the effects they bring about are positive or otherwise depends on how the players in the industry will react to the circumstances.
Rent has become the more practical choice
Millennials are not defying this “tradition” simply for the sake of it. Millennials, both global and Filipino, believe that renting is the more practical route to take.
For global millennials, the recent recession has left them temporarily unable to purchase their own real estate. Thus, they resort to renting or moving back to their parent’s homes.
The case is different for our millennials. Filipino millennials are more likely able to purchase real estate than many of their global counterparts. The country has avoided the recession, Filipino millennials are not drowning in student debt, and they also take up a large portion of the workforce. They are also becoming more money savvy. They are wary of their financial options, and are taking steps to grow their overall income. The most recent Nielsen’s report show that Filipinos are becoming smarter consumers, making more effort to save than many of their global counterparts.
As of this writing, the Philippines leads in most searches for “apartment for rent” worldwide on Google Trends. However, they also rank fourth and sixth in searches for “condo for sale” and “house for sale.” The numbers show that while Filipinos continue to rent, they are still in the market for buying properties.
A major factor deterring Filipino millennials from buying properties is the chronic problem of the country’s roads and infrastructure. This is especially true in Metro Manila, where it can sometimes take at least an hour or more to get from one destination to another, even if it should just take 15 minutes when plotted on Google Maps. Millennials are tech-savvy and need to get things done faster, so when millennials are always on the move, renting is the more hassle-free, practical choice. By renting apartments, millennials, on top of saving money for a more permanent residence can waste less time driving or commuting to offices and commercial areas.
Current trends must cater to the average millennial
With talks of a possible property bubble looming over central areas such as Metro Manila, this could be quite worrisome. OFWs may be the main driving force that keeps the property market buoyant, but millennials choosing to solely rent may still pull down the residential market if they are left with few options. Thus, the developments in both residential and office real estate markets must begin to cater to the millennial lifestyle.
Some real estate developers have picked up on the needs and preferences of the average working millennial. Forecasts and reports from real estate marketing consultants show that offices are spreading out with new central business districts being established outside Metro Manila. No longer do millennials have to travel far for work once these business districts emerge. Meanwhile, more vertical lower-middle class properties are being built, giving middle-class millennials more options. Townships are also a possible choice for millennials - though a little pricey - as it brings residential, office, and commercial real estate together. Any property offering that allows flexibility and provides convenience will be favored by Filipino millennials. Adding easy lease-to-own terms, and flexible housing loans, will reel them in even faster.
So if a real estate developer wants to thrive in the age of millennials, be wary of their fast-paced lifestyle and their need to travel efficiently, and offer them a space that can support their growth.