We look at the property ownership preferences of the country’s Generation Y. Due to their relaxed lifestyle, millennials are colloquially known as “generation rent”.
Millennials, otherwise known as Generation Y or those born between 1981 and 1997, make up 36 per cent of the UAE population and represent the biggest demographic segment worldwide. Developers are now delivering communities that incorporate “live, work and play” elements, designed to appeal to this relatively young population. Affordability, eco-friendliness and a preference towards renting are among the common trends witnessed globally. However, is the millennial buyer’s profile any different in the UAE?
In the current market, millennials tend to be careful with their spending and liabilities. They are also less financially stable than their Generation X predecessors and, therefore, need and want an affordable place to live. When it comes to buying property, they prefer flexible payment options with instalments, and as tenants, they are more inclined to pay their rent in multiple cheques. Unlike their parents, they don’t consider buying a house a top priority — due to their relaxed lifestyle, they are colloquially known as “generation rent”. Research has shown that millennials spend 30-50 per cent of their income on indulgences, such as entertainment, dining out and travel, which leaves little room for saving up for a deposit on a home. Also, with the relatively high cost of property in the UAE, the down payment often proves to be a problem.
An HSBC study revealed that only a quarter of millennials in the UAE own a home. Most expats don’t plan to stay for the long term, and many don’t want to be burdened with the financial commitment of buying a house.
Millennials are tech-savvy researchers and, therefore, a comprehensive digital experience is fundamental to their purchasing journey. According to research by the US-based National Association of Realtors, 99 per cent of millennials look for a home online. Most of them feel that a real estate website that is attractive, easy to navigate and features professional photos is very important when deciding to buy or rent a house.
Location, location, location
Millennials worldwide desire to live close to work, and this is especially true in Dubai. According to a 2017 report by UBS, Dubai placed sixth in the global ranking of cities with the longest working hours — registering a whopping average of 2,323 hours per person per year. Proximity to work allows millennials to commute with ease and save precious time and money on fuel.
In addition, they prefer to live near the Metro and other modes of public transport so that they can eliminate the extra costs of owning a car and don’t have to worry about traffic. This also enables easy access to malls, restaurants and entertainment hotspots around the city.
Design and amenities
Studies by Asteco in the region have shown that millennials prefer to live in newer properties equipped with all the necessary facilities, such as allocated parking, a swimming pool and a gym. Whether buying or renting, they tend to opt for units with an upgraded kitchen and bathroom.
When it comes to layout, millennials tend to favour a large and modern open-plan set-up with a kitchen that opens directly into the living room, as this is optimal for entertaining guests. The presence of a home office is also a plus.
With the UAE population growing each year and more millennials relocating here, developers need to incorporate these elements in their projects if they want to come out on top and keep attracting buyers. It’s likely that key trends such as affordability, convenient location and stylish, modern design will continue to dominate the millennial property market for the foreseeable future.