They’ve been dubbed ‘Generation Rent’ and there’s mounting evidence that property ownership amongst Millennials (born between 1980 and 2000) is on the decline – opening up opportunities for landlords to tap into this burgeoning rental market segment.
Today, Gen Y makes up 22 per cent of the population (5.22 million) and while this generation is set to take over workplaces in the near future (they already represent the largest cohort at 34 per cent), their rates of home ownership are dwindling.
Between 1982 and 2011, the home ownership rate for 25-34-year-olds declined from 56 per cent to 34 per cent. And for many, renting long-term is becoming the norm. Research from the Australian Housing and Urban Research Institute revealed a surge in the proportion of long-term tenants renting for 10 or more years – up to one-third of all private renters in 2013, compared to 25 per cent two decades ago.
There are many factors that come into play as to why 25 per cent of Millennials believe homeownership is five to ten years away (according to the Bankwest Curtin Economics Centre Housing Affordability Report 2016), including housing affordability, cost of living, changing priorities and fluidity in careers.
KPMG’s Banking on the Future Report 2017 has found that Millennials are prioritising life experiences, luxury items and travel over property ownership. The result is that 20-somethings are making up an ever-growing number of renters (under 35s currently make up 37 per cent of the rental market).
The profile of the Millennial renter is different to that of the generations that leased before them. This in turn influences what they look for in a rental:
- Location & proximity
Many young Australians want to live in urban environments. They want to be close to work and entertainment.
According to a survey by Nelson Alexander, the three most important factors for Gen Ys in choosing a property are being close to family (44 per cent), being close to work (43 per cent) and being close to friends (24 per cent).
Walkability and easy access to public transport also rate highly.
The generation is tech-savvy and connectivity is paramount – NBN or WiFi are often non-negotiables. Following on from this, smart home technology/automation is also sought-after.
- Clean, modern & simple
Millennials are looking for modern, clean and simple styles. Think hardwood floors, open plan living and single storey homes.
Being able to live with a furry companion is cited by many when it comes to finding the ideal rental.
Eco-friendly and sustainability features appeal. Outdoor areas, including community areas, are also high on wish-lists.
Many Millennials live alone, making home security a priority.