Millennials in Asia may have spending power and a rising influence in terms of consumption, but they remain selective when it comes to property. Young adults in the Asia Pacific region prefer affordable but practical condos and aren’t afraid to rent if they do not like the price, shows research from CBRE.
In Thailand, there is a very high level of homeownership with over 80% of households owning their own property, but this hasn’t translated to the younger generation. Many young Thais aren’t able to afford traditional housing in Greater Bangkok where prices have surpassed what household incomes can afford. This has seen the group turn to other options.
“Low affordability has turned millennials’ attention to the possibility of residing in condominiums. The option for a condominium purchase is a popular alternative as condominiums offer a smaller area which results in a lower lump sum price. In Bangkok, a 1 bedroom condominium could cost half the price of a single-detached house,” says Chotika Tungsirisurp, CBRE Associate Director.
The survey reveals that millennials do not wish compromise their living standard for cheaper products and will wait until a property offers everything they want becomes available before making a purchase. Until then, this group doesn’t mind renting a condo.
“While Bangkok currently has a small population of millennials renting, the expansion of mass transportation system in Bangkok makes the option of renting cheap condo outside the downtown area and commuting to work much more viable. The share of millennials that rent condos is expected to rise unlike in the past when condo renting was largely confined to expats only but the rental budgets for Thai tenants will be much lower than most expatriates,” says Chotika.
Developers are urged to create smaller, affordable, and practical condo units that feature good amenities in order to convince millennials to buy instead of rent. An affordable project in a preferred location is the most likely type of real estate to attract millennials buyers.