A new generation is emerging, that is driven, goal-focused and rapidly moving up the income ladder. Young people – in their twenties and early thirties – constitute an important market. They have the means to buy property, many are interested in doing so, and we need to know how to sell to them.
Nothing is more important here than the internet. It has widened the vistas available to potential buyers immeasurably. Denis Quayle, Principal at Harcourts Maynard Burgoyne Constantiaberg notes that this has a particular impact among younger buyers: “In our experience, nowhere are online platforms more important than among young people. It is through these that they are most likely to make their initial approaches into the property market. It equips them with a stock of information and assumptions. From there, they can move into the market with clear ideas about what they want. It takes a confident, knowledgeable agent – one familiar with the online world and the real property market – to engage effectively.”
Younger buyers also have particular interests that will need to be factored into their choice of properties. Their needs will likely be different in a few years from what they are now. Properties bought by an up-and-coming couple should be able to accommodate a family in the near future. The clients will probably be aware of this, but not always of the options available to accomplish it. Is the property on offer already suitable for a family? Are there particular features that might be needed – a laundry room, a study, a family room – for reasons of lifestyle or convenience? Do the buildings lend themselves to alteration or expansion?
That being said, anecdotal evidence from abroad suggests that many well-heeled young people are choosing to remain out of the property market – renting rather than buying. To a large extent this reflects a desire to remain liquid, and prioritising their life experiences. In other words, rather than buying a dream home, they’re choosing a dream holiday.
This means that we as agents are often called on to make the case for property ownership – to move prospective clients from curiosity to commitment. And the benefits of buying young are compelling. They cannot be overemphasised. Rather that paying rent to a landlord, the “rent” is converted into equity, and sooner or later the property will be owned free and clear, with no debt and no more demands for rent.
Indeed, property is the one type of wealth that grows as you sleep, merely by its existence, appreciating in value (over the long term) ahead of inflation.
Perhaps most importantly, a property bought early is an investment in a secure retirement. The home, as a primary asset will become the foundation for growing a wealth portfolio. Equity can be leveraged to purchase other properties for rental income, producing an ever-expanding pool of value. Indeed, it is not unknown for well-chosen property investments to fund a comfortable retirement. Deni Quayle explains. “One property – the erstwhile holiday flat on the coast, perhaps – provides a rent-free home, while other properties provide a steady stream of rental income. This is a wonderful, rational plan, but it’s only possible if you start early.”
Tapping into this market is lucrative opportunity for agents – particularly those of us fortunate enough to be working in the Western Cape, which is attracting an ever-growing stream of young professionals. But it is also a market that needs considerable persuasion skills, and an understanding that young people are probably after something a little different from and more versatile than what we are used to providing. A challenge certainly, but one well worth taking up!
This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Errors and omission excepted. (E&OE)