Generation Y - Do They Buy or Rent
Wednesday, July 18, 2012
Generation Y (Gen Y), also known as the millennials, are the generation born from the mid 1970s to the late 1990s. Gen Y has been categorized as a media savvy, technology using multi taskers. This generation has also been categorized as the generation that has spent more time in post-secondary education and thus starting traditional adulthood a lot later in life (most Gen Y are just starting their careers by their mid-twenties, and many are waiting for marriage and children well into their mid to late thirties).
According to some, Generation Y is seen as a generation of those who have not experienced a tougher economic environment. They are instead distinguished as a group that focuses more on living largely with a carefree air about them. For some, Gen Y live for the now, and spend much of their money on their lifestyle, trips and gratifying (now) experiences. Many Gen Y folks have not entered the world of real estate. But then again why would they? Buying a house takes a lot of commitment. In this day and age where careers change almost as much as fashion. With this lack of stability, owning a home is a very risky trend. Gen Y’s like to be flexible, so perhaps owning a home might not be the right choice.
In defence of the Gen Y, people are now waiting longer to get married. It is tough to buy a house on your own, which is different from traditional times thirty years ago, when a married couple would enter into the real estate market together. Most Gen Y’s are renters. Perhaps due to a lack of commitment, but perhaps for a wiser choice, financial freedom and flexibility.
Some say that renting is a waste of money. But really, do people really ever own their homes when they pay a mortgage over 25 years? The interest alone on a mortgage might be equivalent to what a renter would pay a year in rent. Then to look at all the associated costs of owning a house, renters might be making the safer choice.
Gen Y represents a significant part of the nation’s population in Canada. While the age of Baby Boomers declines along with their need for mortgages, Gen Y is presumably going to become a very important segment for the lender market. Looking at the differences that lie between the Baby Boomers and Gen Y is comparatively more aligned in terms of social equality and welfare. Moreover, they have unique impressions and views of the world that they have molded through their aspiration of establishing connectivity with the world that surrounds them.
Indeed, Gen Y is truly connected in the complete sense as this population interacts among itself and globally through innumerable channels like email, blogs and social media/networking sites. The key for property buyers and renters/ mortgage lenders is to get connected. The new generation certainly depicts an impressive target market for the real estate industry. However, Gen Y may keep renting to maintain their flexibility and freedom.