News
Generation Z as a real estate customer
While I was thinking about what topic to talk about through writing, I stopped to think about what type of real estate consumers would be those who today are between 20 and 25 years old, the so-called Generation Z, officially defined as such in 2019 by the Pew Research Foundation as those born between 1997 and 2012. According to various publications on the web of research carried out by specialists, consultancies, journalistic publications and a long etc., which we will not go into here because there is already enough of it on the Internet, they have many similarities with the Millenials, the generation born between 1981 and 1996.
Generation Z is defined as digital natives, the glass generation, and so on. They are not very different from the Millenials, who have experienced the transition to the digital world, some with greater difficulty than others, but with a different vision.
While the Millenials are best known for being the first global generation to share the same knowledge and values of the digital world, which they adopt quite naturally, adapting easily to changes, they are considered enterprising, optimistic, tolerant, persevering and hard-working and see technology as a complement, being more prone to offline shopping.
On the other hand, Generation Z youngsters consider themselves immersed in the technological society and life on the internet. For them, life is inconceivable without the Internet. They make intensive use of both technology and multi-devices, they have grown up using smartphones, tablets and computers and are driven by digital content. Hence the great success and diffusion of social media among them. For this reason, they have a tendency to appreciate remote work for the freedom and capacity for innovation it gives them. They are self-taught, they do not like routine or focusing on one area, they are flexible, they are interested in global issues such as climate change and non-discrimination. They are interested in both their personal and professional development and have greater access to information and education in all areas than existed before the massive existence of the Internet.
before the massive existence of the Internet.
Their intensive presence on the Internet makes them purely digital buyers, who value the opinions of direct users of a product more than those of influencers paid by a brand.
As a result of the democratisation of the Internet, as well as having lived through a pandemic such as Covid-19, many purchasing habits have changed, narrowing the differences between the two Generations.
We are talking about two generations that have arrived to change the world and are undoubtedly influencing the real estate sector.
Therefore, we are facing a demanding and very well-informed client, as prior to the purchase, they will study the characteristics of the property we offer, its sustainability and energy efficiency, analyse the price and its comparative in the area, evaluate the area in terms of its connectivity, its proximity to services, public transport and workplaces. It is also not unusual that, despite having all the information we offer you, you will request a virtual visit prior to your visit to the property.
This undoubtedly results in a permanent updating of the Real Estate Agents who attend to their requirements, in order to provide a quick and effective response, as the immediacy of their demands is something they value enormously.
Given the characteristics of these two generations, it is no small matter to take into consideration their purchasing power and therefore their access to home ownership, especially after the impact of not only the 2008 economic crisis experienced by the Millenials through the anguish of their parents, but also the Pandemic-Covid 19 in 2020 which has impacted on both generations.
Currently, the increase in rates from July 2022 and having 30% savings prior to obtaining a mortgage, has delayed the access of older Generation Z to housing, which they consider important to be able to consolidate their own space, made to their own taste and personal style. Arguably, the situation for Millenials, who are currently in the 27-42 age range, is more complicated, as many of them have already started a family.
According to a survey published by Landgeist.com (https://landgeist.com/2023/04/15/home-ownership-in-europe-2/) there is still a strongly rooted idiosyncrasy of home ownership in the EU, which is still ultimately seen as a safe haven asset and long-term investment. However, new forms of home ownership are taking shape for those who cannot currently afford to own their own home. These include rent-to-own, co-living with co-working spaces and shared renting.
This has also shaped the creation of new housing preferences by Millenials and Generation Z, with the creation of more diaphanous rooms with large spaces to share and with outdoor spaces, located in the outskirts of large cities, where the price is lower, but with good access to all services, driving the boom in the construction of Built to Rent and investments in Real Estate Crowfunding whose characteristics are widely explained on the web.
There is also a sector in both generations and linked to technology in its different forms, whose income allows them to access the Luxury Sector, usually in the hands of older generations. They are gradually making their way into this sector, incorporating new concepts of quality, comfort and sustainability, which preserve and integrate with the environment and nature.
Undoubtedly this is and will always be a challenge for those who wish to provide advisory services, management, purchase and sale of real estate assets, and to be at the height of what the new generations demand and that I believe will be even more demanding in the future, where the protagonist wants to be the buyer and demands to be involved in the whole process of buying and selling. In fact, this is already an existing reality!
Real Estate
Being a real estate agent is not easy
We started in this activity I would say almost by chance. In fact, when we moved from Argentina in 2002 because of the 2001 crisis, the one of the corralito, we had representations of food produced in Argentina, which we offered to the Hotels. This led us to accept the offer to sell Hotels and to become Hotel Brokers, which in 2015 became part of the Real Estate activity in which we are immersed today.
It has been a very interesting path and the learning we have gained from it has been extremely enriching, both professionally and personally. In this long journey we have met incredible people who have helped us to become better acquainted with the reality of Real Estate in Mallorca, which by the way, has its own intrinsic complexity.
Without a doubt, being able to navigate these complexities has been a challenge, from which we have emerged successful, albeit sometimes with a few bruises.
Our objective has always been to provide a quality and responsible service, as we believe that the acquisition of a real estate asset, whether for personal or investment purposes, is not the same as buying a pair of shoes. In this respect I always try not to deviate from Steve Jobs’ maxim: “… I know a yardstick for quality. Some people are not used to an environment where excellence is expected.” ….
The complexities I am referring to may seem quaint, but many of them are the result of the lack of professionalism of some of the actors involved in this sector. An example of this is that in Spain there is no law regulating the activity of real estate agents at national level, which establishes the minimum educational requirements for carrying out this activity throughout the country, as is the case in other countries. In short, anyone can work as a real estate agent, even if they do not have the professional aptitude to do so, because it is not the responsibility of the State to regulate this activity, but rather the Autonomous Communities are the ones that have the competence to do so. In this respect, the pioneer in this area has been Catalonia, which since 2010 has had a Compulsory Register of Estate Agents under the auspices of the Generalitat, requiring its members to have a minimum level of 200 hours of vocational training, financial solvency and civil liability insurance. Likewise, the Register is compulsory in Extremadura and Valencia, while in the Autonomous Regions of the Canary Islands, Navarra, Madrid, Murcia and the Basque Country registration is completely voluntary, while in Aragón, Castilla y León, Castilla La Mancha, Asturias, Cantabria, La Rioja and Galicia, the Balearic Islands have not yet defined whether it will be voluntary or compulsory, and Andalusia has failed on the grounds that it is unconstitutional. So, this is the situation of the practice of the profession of Real Estate Agent in Spain today.
Undoubtedly this is not a minor issue, since if we consider that the Real Estate Activity represented in 2022, according to the INE, 11.41% of the Spanish GDP, and in October 2023 there was a total of 167,771 assets transferred, i.e. 9.5% more than in September 2023 but -0.8% than in the same period of the previous year, we estimate that they should be in highly professionalised hands. This would be like saying that 11.41% of Spain’s destiny is in non-specialised hands, a universe too large to be left to chance.
We believe that there are too many interests at stake for us to continue in this situation in the 21st century, although if we compare it within the current world context, this does become a minor issue.
However, all the minor issues end up integrating and shaping the major issues that end up defining a national and global context, like the number of grains of sand that make up a desert or the bottom of the sea, which is why it is absolutely necessary to find a more than immediate solution to them.
This is already recognised by the Spanish Constitution in its Art. 47 and on which Law 12/2023 of 24 May (new Housing Law) the basic right to housing, regardless of the economic value and purchasing power of each citizen, to allow these rights to be manipulated by people without knowledge and/or speculative entities with little or no scruples.
Undoubtedly this is an issue that has given and gives a lot to talk about and I imagine it will continue to give a lot to talk about, who knows for who knows how long. In the meantime, in the midst of so much chatter, measures that protect not only buyers and sellers but also Real Estate Agents themselves could be brought down to the level of the concrete and that will benefit the general interest and the community as a whole.