Introduction
Young investors are changing global markets in every area of the economy. From travelling and tourism to investing in stocks, every industry must get ready to address the needs of the young generation who are wealthier than their ancestors comparatively. In countries like Pakistan, young people are in the majority. Different markets have to cater to the needs of the youth to stay relevant for the population. Traditionally, real estate has been an investment market dominated by mature and middle-aged people. Investments in this sector are capital intensive, making it difficult for young people to afford investments in this sector. Today, this notion is becoming redundant as young people are increasingly becoming entrepreneurial and generating substantial wealth. The real estate sector must reorient itself to cater to this class of real estate investors by modifying its product offerings and communication channels.
Young Real Estate Investors are Tech-Savvy
Technology and digital devices are major drivers of economic growth and prosperity, and it holds special significance for young people as they are more accustomed to using and adopting newer products. Millennials and Generation Z are most likely to use their digital gadgets to conduct due diligence for real estate investing or even house hunting. According to the National Association of Realtors (NAR), 99% of millennials search online to get general-purpose information about the real estate market, home buying, or the housing market in general. They are obsessed with using their mobile devices to search for everything. This is a significant shift in terms of user behaviour, and the real estate agents, developers, and other companies are constantly trying to reorient their product/service offering to address this age group. The change shows that real estate agents need to upgrade their marketing strategies and negotiation skills to stay relevant in the industry.
Changing Communication Channels
As a result of the uptick in the use of technology, the communication channels between investors and realtors have shifted to digital means. According to real estate experts, most millennials prefer to use technology to communicate with their realtors. According to NAR research, real estate agents adapt to this demand for electronic communication, with 90% of agents communicating via texts, 94% using email, and 34% chatting with clients through instant messaging.
The use of tech is limited to words or the exchange of superficial information regarding a potential property but is extended to other kinds of communication. Young investors use digital means to schedule appointments, ask questions, or show interest in property investment through digital means as well. A tech-savvy youth is leading agents and brokers to introduce features like live streaming and video in lieu of traditional pictures. The mainstreaming of Virtual Reality (VR) technology is also motivating young investors to seek more immersive experiences of the potential real estate offering. VR technology allows its users to block the outside world from their experience, thus allowing potential buyers and renters to through a virtual tour of a property. The process can help potential real estate investors save time and travel expenses as the virtual staging of property becomes mainstream. To sum up, increasing advancements in VR and other immersive technologies is forcing real estate agents and companies to quickly adapt to the technological needs of modern society.
Young People Have Ample Time to Invest, Mitigate Risk and Re-Strategize
As mentioned earlier, as an investment avenue, real estate has been dominated by middle-aged or older people. With young people entering the real estate investment sector, their strategies are quite different from the old and mature investors. Most old-age investors seek a secure investment and have less appetite for risk. This is because they have to prepare for a senior and sedentary life in which a passive and stable source of income can financially support them. However, young investors don’t exactly employ this strategy. Unlike old investors, they have ample time to invest early and take risks as they have fewer social and financial responsibilities. As a result, young investors can also follow a long-term buy and hold strategy which will allow them to hold on to their assets even if the market takes a short-term downward dip. This also gives the young investors ample time to re-strategize their investment decisions according to their needs or the changing environment.
Conclusion
Real estate agents must modify their products and services to the young and informed potential real estate investors of today. Technological advancements have completely transformed the means of communication between investors and agents. Young investors have a large appetite for risk compared to their more mature and older counterparts, forcing the real estate market to come up with investment products that can be potentially risky but at the same time bear a high return on investment.
