ASPIRATIONS OF MILLENNIALS RESHAPING HONG KONG REAL ESTATE SECTOR
ASPIRATIONS OF MILLENNIALS RESHAPING HONG KONG REAL ESTATE SECTOR
November 8, 2016
CBRE Research Reveals How Changing “Live, Work and Play” Priorities Among Millennial Workforce Is Creating New Paradigm in Asia Pacific Real Estate
Hong Kong, November 8, 2016 – CBRE today unveiled landmark research into the economic impact of millennial lifestyles and aspirations on residential, commercial and retail real estate sectors in Hong Kong and across Asia Pacific.
The inaugural report, Asia Pacific Millennials: Shaping the Future of Real Estate, reveals that Hong Kong's millennials share similar long-term lifestyle priorities with other generations, despite often superficial perceptions of this emerging superclass.
The findings demonstrate that perceptions of millennials as preferring informal employment and avoiding financial responsibility are inaccurate. According to the research, consistent with previous generations, most Hong Kong millennials aspire to buy a home, undaunted by the city's high property prices. The report also illustrates that this demographic aspires to carve out a stable career, but takes into account factors such as office design – an important consideration for Hong Kong's employers, given the city's low unemployment and fierce competition for talent.
“Millennials represent a game-changer for businesses across the board, both in Hong Kong and across the region. Their lifestyles and priorities will shape economics, redefine opinions on workplace design and functionality, and drive new attitudes towards consumption and experience for the foreseeable future,” said Tom Gaffney, Managing Director, CBRE Hong Kong, Macau and Taiwan.
“Millennials represent the fastest-growing source of spending power regionally. They make up the most influential demographic framing future trends in real estate through their attitudes, values and behaviors,” said Marcos Chan, Head of Research, CBRE Hong Kong, Macau and Taiwan.
LIVE: Lifestyle and Home
The survey found that, while over 70% of Hong Kong millennials aspire to own their own home, only 5% have actually achieved this, compared to a global average of 15%. Eighty-five percent highlight the failure of wages to keep pace with home prices in Hong Kong, and over 40% say that if they were to buy a home, they would need financial assistance from their parents or other relatives.
Because of surging property prices and the difficulty of accumulating the necessary capital to buy a home, over 80% of local millennials are still living with family – the highest proportion in the study. Moreover, most of them won't be leaving the family home anytime soon – 31% don't anticipate doing so for 2-5 years, and 21% say they have no plans to do so at all.
“The challenges that Hong Kong's chronic housing shortage poses for millennials can be mitigated by the construction of more affordable housing for rent and sale,” said Chan. . “To help millennial first-time buyers to accumulate the necessary capital for down payments, there needs to be innovation in tailoring mortgages to cater to this group.”
WORK: Talent and Workplace
Millennials comprise 25% of the total workforce population in Asia Pacific, but only 18% in Hong Kong. While salary and benefits are still the main draw when considering a job, millennials also factor in lifestyle elements such as office design, flexible working, location and commuting time.
The survey findings underline the importance of a high quality office environment. In Asia Pacific, more than 70% of respondents believe that employers should put more thought into their working environment. In Hong Kong, less than 50% of millennials say they are satisfied with their current office design and layout, aspiring instead to work in the newest, highest-grade office buildings that are beyond the financial reach of many employers.
Competition for talent is fierce in Hong Kong due to its famously low unemployment, providing local millennials with opportunities for job-hopping. However, on a regional level, job loyalty among millennials is actually higher than common perceptions would suggest: two-thirds of Asia Pacific millennials expect to work for the same company, or for a small number of companies, throughout their career, provided that employers can meet millennials' prerequisites of inspiration, responsibility and career progression. People-centric workplace strategies that embrace diversity, choice and community—major draw cards for Asia Pacific millennials in career choice —can keep talent happier, more engaged and more productive.
PLAY: Socializing and Shopping
Hong Kong millennials are more likely to spend their time and money on leisure activities and experiences like travel, entertainment and dining than previous generations. In fact, when it comes to eating out, Hong Kong millennials do so more days per month (11.7) than their regional counterparts, driving the city's thriving F&B industry.
However, Hong Kong millennials also emerge as the biggest savers in the five markets surveyed, typically saving over 20% of their income on average.
“To capitalize on the business opportunities that millennials and their spending habits present, retailers need to increase the experiential element of their offering. Part of this lies in providing an environment for visitors to socialize and relax. In addition to increasing F&B, cinema and entertainment elements in shopping malls, retail landlords should consider organizing more live entertainment to attract millennials. At the same time, they need to be mindful of their tenant mix, to maintain their appeal to other generations too,” added Chan.
In December 2015, CBRE Research conducted a global survey of 13,000 young adults aged between 22 and 29 to examine how they live, work and play, and what this means for real estate. The findings were used to produce the Asia Pacific Millennials Survey covering 5,000 respondents in Australia, China, Hong Kong, India and Japan (1,000 respondents in each market). The survey also explored differences between millennials of different gender, employment status, marital status, education and income.
Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.