Everything you know about millennial renters is wrong
Everything you know about millennial renters is wrong
Well, at least most of it
Millennials, the generation loosely defined as born between 1980 and 2004, are at the prime of their lives. They are already the largest generation in many countries’ work-forces. But where their predecessors, the Baby Boomers and Generation X, have worked toward home ownership, these youngsters have been scaling the housing ladder on their own terms.
Calling millennials “Generation Rent” has turned out to be a fair assessment. Their reputation as perpetual lodgers in “The Hotel of Mommy and Daddy” is not entirely untrue, too.
That it’s their choice to be both is not.
Housing affordability has been an issue for millennials more than any other generation in modern history. As a result, a staggering 64 percent and 49 percent of millennials rent homes or still live with their parents, respectively, according to CBRE’s “Millennials: Myths and Realities” study released this month.
The report surveyed 13,000 millennials in their 20s across 12 countries, in addition to 7,000 young members of CBRE staff worldwide.
Millennials are especially helpless in the searing property markets of Asia. Eight of the most rapid-growing housing markets in the world are all in China, according to Knight Frank’s last Global Residential Cities Index. In Beijing, millennials with children have resorted to living underground just to be close to schools.
Worldwide, around 74 percent of CBRE’s respondents reported that wages are not keeping abreast of housing inflation.
More: Why millennials are ditching mortgages for luxury motor homes
In spite of it all, millennials do not intend to remain tenants in the long run. Contrary to prevailing opinion, around 60 percent of millennials still aspire to buy their own houses much like their parents and grandparents, according to the CBRE report. Forty-three percent believe they can move out of the nest within the next two years.
Around 62 to 72 percent of millennial homeowners have been able to dip into their savings to fund a deposit on a house. Around 34 to 36 percent were able to use banking loans.
There are, of course, millennials who not only just skip the ladder; they kick it entirely. Only around 16 percent of millennial renters surveyed by CBRE are adamant they will not buy a house in their lifetime. Also, 12 percent reported no plans of moving out the nest.
Culture undercuts the prospect of home ownership, especially in Asia where it is a highly prized symbol of success. Millennials surveyed in Asian countries are most likely to to remain in the family coop until marriage or such a time when a two-income household is better equipped to secure a mortgage. Asian millennials are also accustomed to parental intervention when it comes to sourcing funds for a deposit.
Next to affordability, short-term convenience plays the most into the decision of many millennials to rent. Thirty-one percent of millennials cited this as their rationale for renting. Two-thirds of CBRE’s respondents agreed that home purchases entails lifestyle “sacrifices.”
“Rental providers can capitalize on this by providing accommodations with as many short-term options as possible, which services a busy and mobile lifestyle,” CBRE report authors suggested.
Read next: 2 in 3 Asian millennials still living with parents
Source: Property Report