Generation Z are the youngest consumers in the housing market today, but while they may be one of the smaller consumer cohorts for now, they are the future of the property industry. This blog offers a snippet of the insights included in Reapit’s newly released report on the Consumer (R)evolution: how to attract, engage and retain the 2021 consumer.
What do they value most?
Generation Z have big aspirations when it comes to housing, and it is important not to lose sight of this generation as they are in fact the future of the property industry. Their values often align closely with Millennials, but they principally hold stability and financial security among their most important aspirations.
Today’s youngest consumers are entering the marketplace at a time when affordability is a headline issue for the housing market. They have grown up watching the impact of the Financial Crisis on Millennials through soaring house prices and low savings, and this has likely influenced Gen Z consumers to value security and stability, with financial security and homeownership at the centre.
According to a survey from the financial services firm Morningstar, 83% of Gen Zers want to purchase a house within the next 10 years, showing just how much this generation values homeownership over renting. However, the same survey revealed that less than half (39%) feel optimistic about achieving that milestone.
Environmental sustainability is also particularly important for Gen Z. In a survey conducted by First Insight, 73% of Gen Zers said that they were willing to pay more for sustainability – ‘greener’ properties with higher EPC ratings are likely to be favoured over ones which miss the targets set by the ‘green’ generation.
How has their behaviour changed when buying a product or service?
A report from EY calls Gen Z ‘the next big disrupter’:
“Politically, socially, technologically and economically, we are moving at warp speed. These changes have created a generation very different than any known before.”
The youngest consumer generation is not just the next big disrupter but also holds the position as the most digitally adept of all consumers. Customers in this age bracket are ‘digital natives’, in that almost since birth they have had access to smartphones, the internet, social media, and everything that comes with modern technology, in practice engaging and interacting with tech on a scale that outright dwarfs that of previous generations.
Being digitally native has given Gen Z consumers certain expectations about how they interact with products and services, and the demand for tech-driven engagement is high for this generation. According to a survey from the IBM Institute for Business Value, 75% of Gen Z consumers use a mobile phone or smartphone as their device of choice, and 60% will not use an app or website that is too slow to load – this means that businesses which cannot keep up, or lean into the delivery of a mobile-first experience, will be left behind.
Whilst focussed on the stability that comes with owning property, a report from McKinsey & Company finds that Gen Z are introducing different attitudes to products and services than older generations, based around consumption rather than ownership:
“Gen Zers analyse not only what they buy but also the very act of consuming. Consumption has also gained a new meaning. For Gen Z—and increasingly for older generations as well— consumption means having access to products or services, not necessarily owning.”
For the incoming ‘disruptor’ generation this is an important point to note, as the value of services and good customer experiences are likely to become even more crucial to retaining business.
How Gen Zers approach a property purchase
Gen Z consumers have grown up in an environment of rapid digital innovation, as well as one shaped by economic instability and social change. The next biggest consumer generation not only wants to own their own property but are also prepared to save for it and have more tools than ever before to help achieve this as they have come of age amid the FinTech revolution.
When it comes to high-value, high-risk purchases, Gen Zers are both more financially cautious and more prepared to save to acquire what they want. Research from housebuilder Countryside shows that Gen Zers are quickly establishing themselves as the most saving-savvy generation, with as many as 66% of this age group already saving for a deposit for their first home.
Research from Zopa found that around one-third of Gen Zers already have savings of more than £1000, and in addition, they are the least likely generation to have any form of debt. This puts them in a good position to buy a property before the current average for first-time buyers which is approximately 34 years old. More than likely, these traits make them a generation that will not enter casually into high-value purchases – not when they have thought about it and worked towards it for so long.
Interested in more insights on how consumers have changed? Download your free copy of Reapit’s report on the Consumer (R)evolution: how to attract, engage and retain the 2021 consumer.