A recent National Association of Realtors report, Home Buyer and Seller Generational Trends 2015, revealed that the global real estate market is once again witnessing a large number of millennial homebuyers and realty investors. These young financiers have braved the recession that almost strangled the market to death a couple of months ago. However, times have improved and the report indicates they are the largest share of recent buyers.
The survey also indicates that an overwhelming majority of buyers are making use of online real estate portals. Right after finding their dream home they are extensively searching for agents to guide them.
About 34 and younger, who composed 32 percent of all buyers; it was 31 percent in 2013. Generation X, ages 35-49, was closely behind with a 27 percent share. Millennial buyers represented more than double the amount of younger boomers, ages 50-59, and older boomers, 60-68, at 31 percent.
Here are some of the data and surveys that readily prove the point that millennials are positively affecting the real estate market:
1. Cost savings
According to the NAR report, home purchases soar up to 13 percent among multigenerational households. A multigeneration household primarily consists of adult siblings, adult children, parents and/or grandparents. The data represents younger boomers representing a huge segment of multigenerational buyers. The majority are the ones who said that the primary reason for the purchase is because the adult children are moving back into their house.
2. Wage growth
Recession subsided in the last quarter of 2014, and with this, companies have initiated the hiring spree once again. There are millennials, who have managed to survive the pressure of recession and performed well, have been rewarded with a good boost in their remuneration. Moreover, there are sectors such as oil and gas, as well as engineering and health care, that have seen a major boost in the past few quarters. Individuals, experienced or fresh talent, who are entering the fields are getting good pay packages and thus have a high purchasing power to rotate money in the sector.
3. The technological boost
Regardless of their age, the young homebuyers are fast approaching the World Wide Web for their dream home. More than 88 percent of real estate investors voyage through real estate portals for a home to satiate their selling or buying needs. Millennials are making use of mobile apps, Internet and various other online services to get the task done. Technology has given a good boost to each sector, and real estate is no exception. The vulnerable millennial era has also not been able to escape the charm and is rotating money accordingly.
4. A look at the regions
A common thread that runs in the millennial herd is their inclination toward city living and high propensity to rent. These two factors have contributed to urban transformation, a sharp surge in the demand for apartments and a range of development activities in different parts of the world.
Global markets, such as the real estate market in India, America, Europe and Canada. There are cities including Bangalore, Hyderabad, Boston, Seattle and similar regions that are flocked to by young professionals and individuals at a very high rate. The real estate markets in these prominent countries are affected by the millennials and their mushrooming investment activities in a positive way.
Global real estate market contributes more than one-fourth of the economic GDP, and this is how millennials are helping the global market.
5. Commercial realty factor
By the year 2025, millennials will cover more than 75 percent of the global workforce. This is one demographic that has not been raised by the office landlords lately. The commercial market is one of the integral parts of any real estate market. The young generation is interested in living in a locality that places them closer to their work setting. The builders realize that fact and thus are increasingly stationing commercial hubs in such areas. Movement of millennials in big cities for work and a better life has also given a boost to the global real estate market, and thus the world’s demographics are changing.
6. Economic turbulence for good
Foreign investors might still find high-end real estate markets like that of America or India lucrative, which owes to economic turbulence in their home countries. This can be explained by the famous example of the U.K., which is toying with a so-called “mansion tax,” and then there is another case of China, as well.
China has put restrictions on home purchases in urban cities. Further, the foreign money rotators also fear currency fluctuation, which results in a devalue of money they hold in their home countries. The swapping activity is actually positively affecting the real estate markets of targeted countries.
The nations are benefiting each other, and this is another aspect that is well-supported by the millennials as migration is also happening at the very same rate.
These are some of the highlighted factors that are affecting the global real estate markets in the coming years. The younger generation is ruling the business, as well as the professional arena, and is giving a good boost to the entire market.
Vineeta Tiwari is a keen writer on global economy and realty market. A computer graduate and music freak at heart, she has interest in covering the pulse of different real estate markets. She is happy to pen down her views and advice on ongoing trends and tips for investors. She is currently professionally connected with 99acres.com. Reach her on Google Plus.
