Generation Z is transforming the property market as they place increasing emphasis on smart technology, new builds, and eco-friendly materials.
These individuals, born between 1997 and 2012, are entering the real estate market with distinctly different preferences compared to their predecessors, says Richard Gray, chief executive of Harcourts South Africa.
Citing a new international survey, he says 78% of Gen Z home buyers gravitate towards smart technology in homes, 77% lean towards new builds, and an impressive 81% show a strong inclination towards homes constructed with sustainable materials.
"Generation Z is bringing a seismic shift to the real estate landscape in South Africa. The rise in demand for smart features, new constructions, and sustainable materials not only mirrors this generation's tech-savvy and environmentally conscious ethos but also indicates a transformative direction for the real estate industry."
Gen Z, growing up in the digital age, demonstrates a significant interest in smart home features, which encompass home automation systems, internet-connected devices, and energy-saving appliances. This demand, he says, reflects the generation's seamless integration of technology into their daily lives.
"Gen Z's experience during the 2008 financial crisis has made them cautious about large investments. They value financial stability and it's reflected in their preference for new builds, which offer modern design, fewer maintenance issues, and potential for personalisation.”
The survey also reveals Gen Z's commitment to environmental sustainability.
“Their significant influence on the real estate market will make smart and sustainable home features a standard expectation in South Africa's housing landscape."
As this tech-savvy and eco-conscious generation continues to make its presence felt in the home buying market, Gray says it is clear that the real estate industry must adapt to their unique demands.
Lightstone data reveals that, as at June 14, a total of 2 377 buyers aged 25 and younger became homeowners this year. Most (1 035) have purchased homes priced from R500 000 to R1m. This is followed by 799 purchases in the R1m to R3m price band and 485 in the R250 000 to R500 000 band. A total of 58 Gen Zers bought homes valued higher than R3m.
Yael Geffen, chief executive of Lew Geffen Sotheby’s International Realty says the youngest buyers, especially those who are single, generally want to live in – or very near –cities, and be near the action and/or work. They are looking for affordable, low-maintenance lock-up-and-go sectional title properties which offer easy access to all the amenities and to work.
“Walkability is important to these buyers and they prefer mixed use areas where they can walk to shops, restaurants etcetera.... Most are happy to compromise on space for the right location.”
She notes that developers are now also meeting this demand.
Compact and affordable spaces are “most important” to this age group, agrees David Jacobs, regional sales manager for the Rawson Property Group, and so sectional title spaces, from bachelor pads to one- or two-bedroom apartments are the property types they go for.
“Comfortable work-from-home spaces are important, even if the space has just a study nook with great connectivity.”
In addition to these young buyers seeking areas that offer good transportation systems and amenities, they also look for those that are close to gyms, good cafés, and restaurants where they can choose to work from and always have good connectivity.