South Africa’s property market is changing. Millennials, or the cohort of individuals born between 1981 and 1996, are now making a bigger impact on the country’s residential property trends than ever before.
According to Statistics South Africa, millennials account for almost 30 percent of the total population and represent the largest generation to enter the country’s workforce at 51 percent. While significant in size, millennials are also permanently shifting consumer patterns. The oldest millennials are celebrating their 40th birthdays, and like their younger counterparts, are completely comfortable with technology and are likely to use a smart device to search for houses, research neighbourhoods, and communicate with estate agents. In March this year, daily deals app OneDayOnly sold a luxury apartment in Cape Town, originally listed for R950,000 with a massive R150,000 discount in just two short hours.
According to statistics from Comcorp South Africa, the average age of first-time bond applications is 36 years old. In 2020 and 2021, first time buyers made up the lion’s share of bonded home loan applications.
Both here at home and in other locations across the globe, millennials show a preference for living in neighbourhoods with a sense of community and easy access to lifestyle-related amenities, trendy restaurants, and shops. This is why mixed-use developments are a popular choice among first-time buyers who are attracted to both the greater flexibility and control that comes with a village-style mix of retail, restaurants, office space, multi-family housing. South Africans are also attracted to the added safety factor of private estates and enclosed neighbourhoods, including strict access control, 24-hour security, a reduction in major traffic, dedicated parks, and children’s play areas.
Elements of the sharing economy, referring to the shared use of everyday goods and services, is applicable to millennials too. Of course, the practice of extended families sharing a property and relatives pooling financial resources to purchase a home is already well established in South Africa. As South African budgets remain stretched and many families deal with the devastating effects of the Covid-19 pandemic, purchasing a home with friends or extended family makes sense for young people looking to cut costs.
With interest rates still low, millennials and young families are using the opportunity to finally gain a foothold in the property market. It is now up to developers and estate agents to carefully tailor their offerings to this savvy group of new property buyers.
Offering millennials the simplest way to get a home loan, MortgageMe is a tailored application platform that puts first-time buyers in control of getting their own home finance. Says Andrea Tucker, Director of MortgageMe, “Applying for a home loan used to be a tedious and complicated process, MortgageMe takes all the hassle out if it so buyers can focus on the big move and the excitement of becoming homeowners at long last.”