YOLO doesn’t sound like much, as far as creeds go, but this humble acronym and the generation that coined it are having a serious impact on industries and economies worldwide. The South African property market is no exception, and real estate agents are finding both challenges and opportunities in the wake of this non-traditional and tech-savvy generations’ increasing buying power.
“The millennial market is huge,” says Schalk van der Merwe, a Rawson Property Group franchisee based in the Helderberg Basin. “They make up 26% of our entire population, and are now at an age where they are having an increasing influence in the property market.”
FNB statistics place 44% of South African property buyers in the under-40 age category – prime millennial territory.
“As agents, this is a massive opportunity,” says van der Merwe, “but it does mean that we need to adjust our approach to suit the needs and attitudes of a new kind of buyer.”
One of the most obvious changes happening as a result of this evolution is the increasing use of technology in the property industry, with buyers relying heavily on digital content for both information and advice. Far from reducing the importance of an estate agent, however, van der Merwe believes this digital revolution has actually increased the need for a “human touch” when it comes to sales.
“The role of the estate agent is shifting from being a supplier of information to being an interpreter of information,” he explains. “Buyers – and sellers – need help cutting through the noise and overload of the online property world to make sense of what they’ve learned in relation to their own needs and lifestyles. Having real experience, genuine neighbourhood knowledge, and the ability to give insightful opinions and advice is more valuable than ever. We estate agents need to become trusted advisors, not just salesmen – that’s where our future lies.”
The benefit of this relationship-driven approach is the opportunity for repeat business over the years – something made more likely by the millennial generation’s particular approach to property.
“Millennials are buying younger than previous generations, and tend to focus on immediate utility and investment potential rather than finding their ‘forever home’,” explains van der Merwe. “This means they are buying and selling more frequently than other age groups, and will consequently need the services of an estate agent more often over the course of their lives as well.”
With this level of activity, it’s no surprise that the new generation buyer is also having a noticeable impact on property values, particularly in areas that offer great short-term potential and fulfil a few key lifestyle needs.
“We’re seeing a lot of demand for inner-city and ‘suburban CBD’ properties, where buyers can live, work, play, eat and shop all practically within walking distance of their homes,” says van der Merwe. “These properties tend to fit well into the typical millennial budget of between R1 million and R2.5 million, and also offer the kind of lifestyle and short-term growth potential that appeals to this upwardly-mobile market.”
In addition to neighbourhood connectivity, digital connectivity is also becoming more relevant to property prices and sales. “High-speed internet is as important as electricity and water to the millennial market,” says van der Merwe, “and if the American experience is anything to go by, the roll out of our ‘fibrehoods’ is going to start positively affecting property prices and marketability very soon.”
This is, however, unlikely to be the last of the changes the millennials bring to the property industry, with the oldest of their generation only now heading into their mid to late thirties. If anything, the bulk of the millennial impact on the market is yet to come.
“It’s an exciting time to live in,” says van der Merwe, “which is just as well, because… you only live once!”
