Millennials Set To Rock Home Ownership In 2017
Don’t believe the hype about millennials being slackers. More are saving their money to jump on the property ladder.
The popular notion about millennials is that they’re not the hardest working of demographics. Terms such as “the gig economy”, “co-working” and “binge watching” give the impression that 18-34-year-olds have gamed the system to get by doing the least possible. While that may be true of some, for the vast majority, mired in student debt, high rents and low paying jobs, it’s a lifestyle they can only dream about.
Turns out most millennials are a lot more concerned with their futures than many would think. According to HSBC’s Beyond The Bricks—a nine-country study polling 9,000 people, conducted in October and November 2016—40 percent of millennials are actually home owners and 83 percent plan to buy in the next five years.
“This study challenges the myth that the home ownership dream is dead for millennials around the world,” said HSBC’s global head of retail banking, Louisa Cheang, in a statement. “With four in 10 already owning their home, the dream of home ownership for millennials is definitely alive and kicking. The greatest challenges are in those countries where there is a perfect storm of stagnating salaries and rising house prices — for millennials in those countries, the dream, while not dead, looks set to be deferred.”
While Chinese millennials who own a home is a staggering 70 percent, most of those are urban dwellers living dense population centers. The U.S. have half as many millennials currently owning a home—35 percent, a number which, according to real estate portal realtor.com, is set to rise. The web site surveyed home buyers to get a idea of purchasing trends and predicts that 2017 will see millennial buyers dominate 61 percent of the first time home buying market, almost doubling 2016 figure.
“This represents an ‘Oh, shift’ moment in housing,” Jonathan Smoke, chief economist for Realtor.com said on the company’s blog. “With so many first-time buyers in the market, competition will be even fiercer next year for affordable starter homes in the suburbs. Those looking to buy may want to consider a winter home purchase in order to avoid bidding wars and higher prices spurred by a potential increase in millennial buyers.”
The “don’t own” myth about millennials had many real estate professionals worried about the future of home buying as short term leasing—whether for residential rentals (Airbnb) office space (co-working), music (Spotify, iCloud, etc.), or movies (Netflix)—seemed to imply debt was the one thing many wanted to steer clear of. However, more recent surveys about millennials and ownership debunk this and in fact, support last year’s survey from realtor.com.
“Fifty-three percent of millennials own homes and overall, 88 percent of millennials who do not own a home have one on their wish list, according to a survey conducted by Qualtrics, a Provo, Utah-based survey software firm, and venture capital firm Accel Partners (a Qualtrics investor).
“The sharing economy is here to stay and has changed how many people work and live. But it doesn’t mean that traditional purchases such as cars and homes are less enticing to millennials,” said Mike Maughan, head of brand growth and global insights at Qualtrics—and a millennial himself.” Unsurprisingly, the numbers are even higher for car ownership with 80 percent of millennials currently owning cars and 75 percent of millennials who don’t own a car aspire to own one now, the Accel + Qualtrics Millennial Study 2017 found.
“The world is changing, but in some areas maybe not as much as we think,” Maughan said. “They’re not afraid to put down roots,” he said. He noted that the number of millennials who aspire to own homes holds steady whether they live in metropolitan or rural areas. Good news for the real estate. Great news for millennials.
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