Despite its bright lights and multitude of trendy restaurants, attractions and entertainment, it appears millennials are indeed heading out of the city at the end of the work day.
This is according to the 2017 report of Home Buyers & Sellers Generational Trends by the National Association of Realtors.
It was found that the average house-type millennials sought were single storey family homes with three bedrooms, two bathrooms and a garden. This is great news for older couples whose children have long since flown the coop and are now looking to downscale to smaller, more manageable-sized properties.
Who are millennial buyers?
Millennial buyers are described as aged 36 and under. The report found that 57% of millennials in the study had opted to raise their children in suburbia instead of a mid-city environment.
These millennials were either married, in permanent relationships or had children under the age of 18.
What houses are millennials buying?
A total of 85% of millennials opted for a single storey family home with three bedrooms and two bathrooms. This is in stark comparison to the 7% of millennials who purchased townhouses or row houses and the 2% who bought duplexes or apartments in two to four unit buildings.
What motivates millennials to buy a home?
Half of the respondents had the simple desire to own their own home and considered the affordability, convenience to work and quality of area as the overriding decision markers.
The factors influencing millennials’ purchasing decisions included:
Quality of the neighbourhood – 66%
Convenient distance to job – 65%
Overall affordability – 50%
Convenient distance to family and friends – 43%
Quality of school district – 40%
Convenient distance to shopping areas – 22%
Size of home purchased
The average size of homes purchased was 176 square metres (sqm2). For the most popular house size, it was a toss-up between 139 sqm2 and 185 sqm2 – both indicating a probability of a three bedroom house.
Amount of bedrooms
According to the report, 89% of millennials bought a three bedroom+ sized property compared to the 10% who bought a two bedroom house.
Amount of bathrooms
A total of 58% of the respondents indicated that they had purchased a home that had two full bathrooms and 18% had three bathrooms or more.
What are the first steps for a millennial to purchase property?
When deciding to buy a house, there a few first steps that need to be completed. Although part of the “Digital Wave”, millennials were on the lower end of the spectrum when starting the buying process by looking at houses online.
Instead, a millennial’s first steps included researching information on the process of buying a home, contacting a real estate agent and discussing the home buying process with friends and family. This shows their need to first educate themselves and seek advice before looking at actual properties, online or otherwise.
Problems millennials face
A total of 98% of millennial buyers financed their home loan while 75% said the deposit was the entirety of their savings. BetterBond has found through their own research that it takes the average first time buyer two years to save for a deposit in order to qualify for a home loan.
Problems the average millennial buyer faces are:
- The need to obtain a home loan.
- The need to save up for a deposit.
- Existing debt that makes it difficult to save for a deposit.
Environmentally friendly features considered ‘very important’
The report found that while all age groups had similar results, millennials appeared to be the most environmentally conscious when deciding on a potential home. Certain decisive factors included:
- Commuting costs – 39%
- Heating and cooling costs – 31%
- Energy efficient lighting – 19%
- Energy efficient appliances – 17%
What factors would cause a millennial to sell again?
While millennials may be purchasing their first home, would they move again? The study asked respondents what factors may potentially cause them to sell and move somewhere else. The following factors were noted:
- Moving with life changes – 29%
- Move with job or career change – 20%
- May outgrow home – 19%
- Want a nicer home with added features – 10%
- Not moving, forever home – 9%
Purchasing a home through a real estate agent continued to be the most prevalent purchase method for all buyers over the last 12 months.
The millennial age group, more than any other age group, chose to work with a real estate agent in order to understand the buying process and receive guidance on negotiation in terms of sales prices and sales terms.