Millennials stay put with their parents because buying a home is expensive
orn towards the end of the last century, millennials now make up for the youngest segment of the workforce — the fresh talent that employers are eager to attract. Central to CBRE’s interest, the organisation came out with a detailed survey on Millennials: Myths and Realities for a deeper understanding of their lives with a strong focus on their real estate choices. Where do they want to live and work? What type of office environment do they prefer? What types of shops do they want to visit, or do they want to do everything online? This extensive and detailed global study tried to address all these questions across all geographies, globally.
Who are these millennials and what are their preferences when it comes to real estate?
India is expected to be one of the youngest countries in the World by 2020, with the current median age being 27.6, which is lower than that of many countries, including USA, Germany and China. As the youngest generation in the country, the group is of great interest to everyone -- from sociologists to FMCG marketers. And it’s not just the generation’s size that has drawn attention. Its habits, too, seem starkly different from its predecessors.Tales abound of millennials’ strange ways. The findings also suggest, though, that more than any generational preference, money is the main factor driving these choices.
Millennials comprise one-fourth of the workforce in Asia Pacific and are a rapidly growing source of spending power. Their growing influence is already driving new trends in real estate markets across the region, making it essential for occupiers, retailers and developers to gain a thorough understanding of their behaviours, requirements and priorities. Millennials are oft perceived as preferring informal employment, changing jobs regularly and avoiding financial responsibility.
However, CBRE Research has found these observations to be superficial. Most millennials save money to buy a home, spend prudently and aspire to carve out a stable career. Our understanding of millennials, therefore, should not be based upon perceptions or stereotypes. The report, titled Millennials: Myths And Realities, took as one area of focus, housing, where millennials are perceived by many to be particularly hesitant — reluctant to move out of their parents’ homes and, when they do, more likely to rent than buy. And, the survey suggests, there’s a germ of truth to this characterisation: A high percentage of millennials do live at home, and renting is relatively popular among the cohort who have moved into their own places.
Of the millennials surveyed, 49% live at home with their parents, with 43% of these planning to stay for three years or more and 12% having no plans to ever leave. As the report observes, though, it’s not home cooking that’s keeping them around.
Rather, “high property values drive the decision to stay,” the authors note. “Steep housing prices and rents, coupled with a lack of suitable jobs, mean that many millennials are not earning enough to live an independent life. For an increasing number, the trade-off is to remain with the folks. Of those who can afford to live independently, many choose to stay at home to save toward deposits on homes of their own.”
The author is chairman, India and South East Asia, CBRE