Author: property 24
1 February 2021
The residential market right now / Millennials head back to the burbs
As Generation Z flocks to the cities, more and more members of Generation Y (more popularly known as Millennials) are steadily moving back to the suburbs to live with their parents and often, their siblings and grandparents too.
And this migration is not only about money – or perhaps the lack of it, as more and more people watch jobs and businesses disappear in the wake of the Covid-19 lockdowns. “It’s also very much about having more living space and gardens and the company of other people you like, love and trust,” says Berry Everitt, CEO of the Chas Everitt International property group.
Millennials, now aged between about 26 and 40, are renowned for rejuvenating many city centres around the world as they fled from the suburbs a decade ago and went in search of the live-play-work lifestyle in their trendy lofts and high-rise apartments handily located close to coffee shops and restaurants, galleries and theatres, gyms, artisanal bakeries and handmade clothing and jewellery outlets, as well as their offices.
But with the advent of the Covid-19 pandemic almost a year ago, Everitt says many Millennials found themselves stuck in small apartments and townhouses and unable to enjoy their previous very social lives outside of these spaces.
Sharing insight on the state of the residential property market, Only Realty owner Grant Smee, says 2021 is driven by affordability, stability in the market, an increase in emigration and a lack of foreign buyers.
Co-living and micro-living on the rise
The need to reduce overheads in a volatile economy has led to a surge in the demand for co-living and micro-living spaces. “Co-living can consist of residents who rent beautifully furnished private bedrooms and sometimes a bathroom but share kitchens and other rooms and amenities,” says Smee.
“In most cases, co-living takes place between family and friends while micro-living apartments usually comprise of one bedroom, one bathroom and space-saving features that encourage minimalist living.”
Home is where the office is
Many are now investing in their homes to ensure that they are fit for both business and leisure.
Cabin fever started to run rampant, especially among those who were also trying to homeschool children in their new at-home workspaces/living rooms. And at the same time, many Millennials were worried about parents and other elderly relatives living in retirement homes and care centres, which were some of the institutions worst hit by the Covid-19 virus.’
“Finding themselves with a lot more time on our hands, some South Africans are also undertaking in home renovations and many are moving to new locations that can accommodate both their work and home life needs,” says Smee.
“To scale back on price and get more space, many South Africans are moving to outlying areas as they no longer need to be close to the office. Here, buyers get a lot more ‘bang for their buck’.”
“So it’s not really surprising that as soon as the harshest restrictions were lifted, they swiftly started to head straight back to the suburban environments of their youth, and either move back in with their parents or pool their resources with other family members and purchase multi-generational properties where there are gardens for the children to play in, ’granny flats’ for the ageing in-laws to be safe in, and home offices that are separate from the main living areas,” says Everitt.
Trendy areas are more accessible
Sought-after suburbs such as Rosebank in Johannesburg, the Atlantic Seaboard and even Sandton are now more affordable and accessible than ever. “Vacant offices are fuelling a surge in property developments and it’s an exciting time to be an investor,” notes Smee.
This month, Balwin Properties made history by reaching R1 billion in sales in just 45-days at their new development in Sandton, Wedgewood.
Smee says there is a unique equilibrium at play in the residential property industry. “Properties over R2.5 million still operate in a buyer’s market because of the higher price point while properties under R1.2 million operate in a seller’s market.”
Adding to this, the majority home loan applications remain between R750,000 to R2 million.
Writing in the latest Property Signposts newsletter, he says some have even gone so far as to move away from the city altogether and head for smaller country or coastal towns, having realized that as remote-working fast becomes the norm, they will increasingly be free to live wherever they please without having to face a time- and money-wasting daily commute.
What is more, many Millennials are likely to make these changes permanent as they experience the joys of owning a property that enables several generations or branches of the family to live together and share costs, chores, childcare and even food production, while also enjoying their own entertainments and social interactions – and provides better security due to the continuous presence of people on the property.
“As a result, there is expected to be a boom over the next few years in suburban home alterations to provide the extra spaces needed to accommodate more family members as well as home offices, entertainment spaces and even classrooms, and an increase in demand for larger stands and smallholdings where extended families can build separate homes and enjoy the best of both worlds: togetherness and privacy when they need it.”
And in this way, Everitt says, the Millennials, who have been prompted by the pandemic to completely rethink their lifestyles for the second time in their lives, are likely to have a profound effect on real estate trends and prices – again.
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