According to analysts from FIVE, a resort real estate developer, new generations of Russians prefer the sharing economy, which makes it necessary to add tenant options to the customer’s profile. Millennials (Y) and zoomers (Z) live according to the «here and now» principle; their priority is assets that combine privacy with financial and transport accessibility. Housing for the alpha (A) generation will be a transformable, interactive space that provides a seamless transition from online to offline, with numerous services for a comfortable life, venues for various events and a coworking area.
The FIVE’s analysts studied the needs of several generations of Russians – millennials, zoomers and alphas – in order to understand what kind of housing will be in demand in the future and what new trends will appear in the real estate market.
Millennials live by the «here and now» formula, which involves giving up future ownership in favor of present comfort. Their ideal apartment is a spacious unit designed for one or two people, with flexible space, changing to quickly developing preferences and interests, with an attractive interior and built-in workspace, located close to developed transport facilities, but in an environmentally friendly location. Privacy and high security of the facility are important features. In addition, the millennial is interested in minimising all household issues and would prefer a “smart home” and an additional payment for the services of the management company. Therefore, the preferred scenario for millennials is to rent serviced apartments ranging from business class to premium or deluxe.
Despite the tendency to put off maturing, for generation Y there comes a time when the money you earn needs to be invested. Then the millennial becomes a buyer and acquires lots that can be rented/sold to people like him. Or those who follow him – generation Z.
Zoomers are similar to millennials in their basic needs. The important differences include deeper engagement in the sharing economy and increased priority of transport accessibility, taking into account the interest of zoomers in an active lifestyle, working from afar and traveling. Generation Z is characterized by a demand for facilities and safe public spaces within a residential complex. They are looking for creative properties with memorable interiors, an emphasis on sustainability and an abundance of «green» spaces.
Elena Kabesheva, commercial director of FIVE: «The trend of «renting instead of owning», a characteristic of the sharing economy, will gain popularity among representatives of generation Z. The demand for rental will increase, however, the desire to buy your own will also increase, so both generations Z and Y sooner or later will want to buy real estate that will not only reflect their lifestyle, but will somehow remain a leading asset for investment. Y and Z will become adherents of various forms of investments, including collective investments, which are gaining popularity today.»
As for prospective buyers – the Alpha generation, whose oldest representatives are now 13 years old – for them the choice of real estate will directly depend on the digital space. They will demand housing options that provide a seamless transition from online to offline and back again.
The interiors and the territory of the residential complex will become scenery, interesting for shooting videos and stories. There will be a massive demand for interaction with real estate, starting with augmented reality, navigation, and the ability to change the living environment, following personal preferences.
Generation A is characterised by a desire to minimise the number of social contacts, which will increase the demand for services. By the time alphas enter the rental market, the culture of wellbeing will take up a stable position, and the services of a wellbeing manager will be on the list of services required for an apartment hotel from business class and above.
Andrey Solovyev, partner at NF Group: «The influence of generations on the luxury real estate market is significant and diverse, since each has its own values, life experiences, social and economic and political conditions, which are reflected in the behaviour and preferences of buyers. The shift from buying to renting real estate, particularly noticeable among millennials and subsequent generations, highlights a shift in life priorities, with mobility and flexibility becoming more important than long-term property ownership. However, the key characteristics of luxury real estate, such as location, security, privacy and high quality, remain permanent values that attract buyers. Despite all the changes in generational preferences, real estate is still a valuable asset. With this in mind, it is important for developers to focus on constant attributes, taking into account the specific requirements and expectations of each generation, in order to remain competitive in the market.»