Generation Y or Millennials are those born in the 1980’s and 1990’s. Many are now entering the phase where they are seeking their first property.
As a property investor, you ask, “What would the property market look like, years from now?”
You want to understand what drives this generation and what their property seeking behavior looks like. After all, it’s a trend that no property investor can afford to ignore.
According to a PricewaterhouseCoopers (PWC) report, they make up 40%-50% of the Malaysian workforce. By 2025, it is estimated that Gen Y will comprise about 75% of the global workforce.
Gen Y is a force to be reckoned with when it comes to property buying in Malaysia. By investing in a property that appeals to millennials, you have a large pool of potential buyers and renters.
“I DEFINE MY OWN BALANCE”
In the PWC report, 97% of millennials interviewed state that work-life balance is a priority.
Gen Yers have different mindsets and priorities compared to preceding generations. Global management consulting firm Hay Group conducted a research that gives us an interesting insight on generational differences.
Baby Boomers strive to make as much as money as they can, for the comfort of their families. But Gen Xers exercised more balance in their life, making family time as much a priority as work.
While Gen Xers view balance as between work and family, Gen Yers view balance as between work and play.
“MY MOMMA SAYS I’M SPECIAL”
Gen Yers were raised by Baby Boomers that wanted their children to avoid hardships and enjoy all the good things in life. Since their momma told them that they are special, so it must be true.
Millennials were taught to believe they could get whatever they want. They believe that they shouldn’t have to go without.
Yet, they are not necessarily spoilt. Let’s just say they believe in work hard, play harder.
“I PREFER LATTE, NOT TEH TARIK”
Gen Yers want to have a work-life balance without sacrificing their social or personal lives. They want to have their cake and eat it too.
So how can you benefit from this Gen Y trend?
A growing population of millennials would prefer the convenience of having everything at their doorstep. I don’t mean your local Mamak stall but upmarket cafes, supermarkets, and the lot. Yes, they want some latte to go with that cake (pun intended).
You will do well by investing in an integrated mixed development that caters to millennials’ lifestyle need.
Integrated mixed developments combine residential, office, retail, and various amenities into a single development. This, in turn, transforms the area into a work, live, and play environment.
Millennials that can’t afford to purchase such property will resort to renting.
“WE ARE ALL SUPERHEROES”
Which generation do you belong to?
Did you grow up watching Rambo (1980’s movie) where fighting problems alone is portrayed as a sign of strength? You are probably a Gen X.
Millennials grew up watching The Avengers (2000’s movie) – where superheroes fight the foes no single superhero could withstand!
Gen Yers prefer collaborating and connecting with others. They crave shared public spaces that foster community rather than just interaction.
Look for property developments that provide ample community space such as full-service fitness centers, multi-purpose lounges and shared outdoor spaces.
Gen Yers’ collaborative spirit also make them embrace the sharing economy such as Uber and Airbnb.
“DON’T MAKE ME DRIVE”
Yuccies or Young Urban Creatives was first defined by David Infante on Mashable as a slice of Gen Y, borne of suburban comfort.
In a recent interview, Prasarana’s president and group CEO, Datuk Azmi Abdul Aziz commented that one of the main groups the LRT3 will be catering to are the Yuccies.
Yuccies are the ‘Uber-hailing generation’ that don’t want to go through the trouble of driving everywhere. They are attached to their gadgets and they love to socialize in areas where it is easy to move around. They will push themselves to stay near places with good infrastructure.
Greater KL is also aiming for a public transport to private vehicles ratio of 40:60 by 2030. The goal is to have 80 percent of the population living within 400 meters of public transport services.
To future-proof your investment property, you need to ensure that there are public transport services near your property.
“WHO ARE YOU CALLING A TOURIST?”
Apart from housing preferences, another rising Gen Y trend is experiential travel.
Experiential travel is the idea of an immersive, local, authentic and adventurous travel. It is the antithesis of tour packages or one-size-fits-all itineraries.
Gen Yers are pursuing ‘luxury experiences’ rather than luxury hotels and Michelin-starred restaurants.
The idea of experiential travel is to be immersed in the destination, feeling closer to a local rather than a tourist. It’s also the opposite of a trip spent on tourist hotspots and approaching a city with a checklist of ‘sights to see’.
So why is this important?
You can turn your investment property into an Airbnb accommodation. This can potentially be more lucrative than renting out your property the traditional way.
“I CREATE MY OWN STORY”
Airbnb enables experiential travel.
Experiential travelers will be able to immerse themselves by staying with locals. It’s all about customized experiences and creating your own story, rather than doing the same things as others.
It also typically cost less than staying in a hotel, suitable for budget-conscious Gen Yers.
There are an estimated 60 million Airbnb users and 640,000 hosts in 57,000 cities.
“WE WILL TAKE OVER THE WORLD”
The World Tourism Organization estimated that millennial travelers represent over 23% of international tourist arrivals in 2015. This percentage is only expected to increase as millennials’ purchasing power rises.
Flying has also never been cheaper with the proliferation of low-cost carriers.
Generation Y will soon, if not already, surpass Baby Boomers as the largest living generation.
Gen Yers will influence trends for years to come. As a property investor, you will do well by capitalizing on the Gen Y trend.