Millennial buyers take on the luxury housing market
Category Market News
The millennial generation are becoming a noticeable force in the luxury property sales market. In a recent interview with The New York Times Christie’s International Real Estate CEO Bonnie Stone Sellers said that the company’s White Paper on the luxury property market highlighted this generation as one of the groups that are driving the increased sales volume in the luxury market. “This is the generation that for the first time is receiving money from their baby-boomer parents or perhaps they were in the tech area and they’ve earned their own money. They are becoming a noticeable force in the market,” she said. Tyson Properties CEO Chris Tyson, an affiliate of Christie’s International Real Estate, says there are few purchases for millennials as experiential as their first home. “Our research showed that the focus on the experience of luxury motivated millennials in 2013 to put their money in real estate was not just because it is a more secure investment, but because it is a real asset that can be enjoyed and appreciated.” According to the 2014 UBS Investor Watch report, Think you know the next Gen investor? Think again, affluent millennials appreciate the ability to enjoy their wealth in real terms. The report says that while in the past success was typically measured in financial and career terms, millennials have expanded this definition to include financial, emotional and experiential factors. Christie’s research also found that several luxury market experts reported that the clientele for luxury homes is beginning to skew younger. Compelled by average prices still below the market peak, low interest rates and backed by the purchasing power of their Baby Boomer parents, millennials, broadly defined as those born after 1980 – comprised a growing segment of $1 million-plus home buyers in many of the indexed cities.
"A survey by the Luxury Institute for Christie's International Real Estate of affluent individuals in the United States show that 57 percent of wealthy young consumers are considering the purchase of residential property in the next 12 months, compared to 21 percent of those aged 45 and older. These younger buyers spend a significantly larger percentage of their wealth on homes and want amenities such as open floor plans and high-tech, fully automated home environments," said Tyson. "Although the millennial buyer is primarily active in the entry-level luxury market, familial purchasing power is pushing young buyers into higher price points. More than a third of millennials with over $1 million in investable assets inherited their wealth and many are allocating funds into acquiring trophy real estate."
Author: Tyson Properties
