Building for Generation Z needs to start now
Generation Z (Gen Z – the cohort after the millennials born between the mid 90s and 2000s) is the first demographic to grow up as ‘digital natives’, which presents a unique challenge and lucrative opportunity for many businesses and industries. However, to simply take your business online is not enough to reach this “insecure” generation; you really need to get under the skin of their wants and desires and build trust. As a demographic, Gen Z is predicted to exceed 2.5 billion people by 2020 (circa. 33% of the estimated global population), therefore its potential to influence the housing market is huge. Although they currently might be mere youngsters, they are the generation that the property world should be taking notice of, and now.
Growing up during the ‘Great Recession’ has given the cohort a feeling of unsettlement and insecurity and most importantly, a desire for stability. In the US, the National Association of Realtors (NAR) has found that Gen Z is substantially different to the predecessor generation, the Millennials, who came of age in the midst of recession, war, terrorism and a stock-market collapse. Gen Z are coming of age with low interest rates, better job prospects and higher wages to help cushion the high costs of university education.
Gen Z’s attitudes to buying property sets them apart yet again from Millennials – they have a pragmatic approach to living that will need to be translated into their future housing needs. While some generations might be happy to rent indefinitely, Gen Z sees renting as a stepping stone to the ultimate goal of home ownership. According to the Zillow Group Consumer Housing Trends Report 2017, 80 per cent of Generation Z often think about owning their own home. This is a generation that values homeownership and therefore, as an industry, we need to start thinking creatively about how to cater to these needs.
Gen Z could equally be thought of as ‘generation video’. They are highly visual and prefer to see videos over text. If we continue to rely on the current methods of reaching potential buyers, we will miss out on this generation entirely. A recent survey found that 95 percent of Gen Z-ers use YouTube. That’s not surprising in itself and when you consider this further, you realise just how important this medium is. Half of users say they can’t live without the video hosting site. Not only does YouTube help to get on the desired first page of a Google search, it is also great way to get brands in front of a generation who value visual content and first hand communication.
Gen Z is also like no other generation before when it comes to brand interaction. They have grown up with Google and Siri in their back pockets, so they expect fast and easy interactions with any service provider or brand touchpoint. They want to ask a question and have it answered immediately – forget about calling an office or waiting days for an email response. If you’re not responding to requests in a timely manner you are likely to lose the opportunity with this generation. Think Chabot’s and Slack…
While Gen Z teens are living in a “get it now” society, the reality is that with home ownership, the majority will not be able to find a deposit to buy property as soon as they would like. They understand that they will have to rent before buying, but again they are very specific with their requirements.
First, they are discerning and want something affordable that they know is good value for money. They will have the ability to shop around and compare based not only on price and amenity but also on the ratings of landlords and furthermore, they will want more transparency and less or no fees associated with their transactions. Most Gen Z-ers aren’t going to pay over the odds in return for an amazing experience, unlike their millennial counterparts who truly value experiences over material things. They are willing to sacrifice now for what they might have in the future. They want to save on their rental property so they can stash away money for the future.
They also crave stability. They want to know they can live in a property for as long as they need while they save. They don’t want to worry about having to move if the owner sells; rent increases and unreasonable admin fees.
The rising tide of tens of millions of Gen Z-ers coming-of-age will soon flood the housing market, so smart developers are starting to look beyond today’s renters and focussing on what is yet to come to ensure they are not only prepared, but a step ahead of the competition. Experts argue that once Gen Z comes of age, they will bring forth a whole new paradigm in real estate. There are huge opportunities for the property industry to tailor their future products and services to this cohort, but to do so we must look to the future – and fast.
Get Conductor to host a Crystal Ball Workshop for you and your team to uncover the wants and desires of your future audience and in turn shape your future proposition.