How millennials and Gen Z are getting into property buying | Everything Property

How millennials and Gen Z are getting into property buying

Gen Z


From non-fungible real estate to real-life ownership, millennials and Gen Zs are embracing property ownership

Generations are a way to classify people by their membership in a cohort of people born at a similar time, and often these cohorts display similar trends and decision-making patterns. There are several similarities between Gen Z, born between 1997 and 2012 and Millennials, who are older, born between 1981 to 1996.  

According to the Pew research organisation, one of the reasons these two generations may sometimes exhibit similar decision-making is that many Millennials came of age and entered the workforce facing the height of an economic recession, resulting in a “slow start” for them. Inevitably this generation’s career timeline overlaps with that of Gen Z. Hence these two generations are considering entering the property market or buying property in the same time period. Moreover, researchers acknowledge that “the differences within generations can be just as great as the differences across generations, and the youngest and oldest within a commonly defined cohort may feel more in common with bordering generations than the one to which they are assigned.” 

Millennials and Gen Zs are highly informed, want to be perceived a certain way and often make decisions based on status symbols. This generation has a high appetite for working from home (WFH), working for companies that offer four-day weeks, joining the gig economy and finding ways to survive while non-working, hence the newly coined term, time-millionaires. Thus, real estate is among the most important acquisitions for this group. While some are buying property, others are considering or planning to do so while enjoying living in rental, communal or family residences.

In the case of Gen Z, they are often referred to as the first digital natives as they grew up at a time of extreme tech innovation. On the other hand, Millennials are considered digital pioneers who witnessed the rise of technology and social media. This sets these two generations apart from any of their predecessors. They think digital first.

“Their first experience of a bank probably wasn’t going into a physical branch, but having their parents set up an account that they’ve always been able to access digitally. Some may even have only ever used their bank’s smartphone app. The same is true for almost everything else in their lives, be it music, gaming, or communication. Why should their approach to investment and savings be any different?” asks Tony Mallam, MD, upnup, Africa’s first passive micro-investing app. This cohort applies the same ideology to home buying. 

They consider owning property a status symbol, and as a financially savvy group, they are likely to purchase property early in their careers. They have considerable buying power, says Carl Coetzee, CEO of BetterBond. “Our data for the 12 months ending September shows the average purchase price of homes for buyers aged 20 to 30, has grown by 3.89%. So, whether they invest in a trendy lock-up-and-go apartment in the city or a secure sectional title unit in a development that offers desirable lifestyle amenities, Gen Zs know that having a home to call their own is a sign that they are financially secure with bright prospects for the future,” says Coetzee.

Moreover, it is noteworthy that currently, in the South African property market, women are buying more properties than their male counterparts. According to the Global Sheconomy Research Report 2022, women are emerging as the leading decision-makers regarding consumer spending, including real estate.

“Women tend to drive the home buying process and are more likely to scroll through listings online than their male counterparts. In fact, 61% of our website traffic comes from female users,” explains Adrian Goslett, Regional Director & CEO of RE/MAX of Southern Africa. Furthermore, the Global Sheconomy report adds that women from countries like South Africa represent one of the highest investment growth opportunities. “We have already seen that the typical property investor profile, based on 2020 data from TPN, is young – under the age of 30, black and female,” says Coetzee.

While the average age of BetterBond’s first-time buyers is 36, TPN data suggests that women investors start building their property portfolios in their mid-twenties to early thirties.

“There’s anecdotal feedback from our real estate partners that women dominate the sectional title market, especially if they are single or responsible for a household,” says Coetzee. In Port Elizabeth, for example, 62% of sectional title owners are women. These properties are often in new developments, have at least two or three bedrooms, are around 32 square metres in size, are located in the inner city, and offer security and easy access to amenities, childcare and educational opportunities, adds Coetzee.

While affordability is always a concern, there are opportunities for young people to flex their spending power in the property market. “Buying a new development or a home below the R1 million threshold will save on costly transfer duties,” says Coetzee. The main banks also offer a range of loan products that include loans of as high as 110% for young professionals younger than 35 who meet the relevant criteria. 

However, unlike previous generations, Millennials and Gen Zs are also looking into investing in virtual real estate in the metaverse. The metaverse consists of expansive and interactive virtual worlds built on the blockchain in the likeness of video games, allowing people to socialise, work, play, and transact. Metaverses are self-contained virtual cities and economies that simulate real-world interactions, but the items owned in the metaverse only exist virtually and not in real life. They are purchased as NFTs (Non-fungible tokens) using cryptocurrencies. Since the metaverse is a virtual world, it also contains “metaverse real estate”, which people and companies have started purchasing. 


A year ago, Facebook changed its name to “Meta”, which immediately increased public awareness of the meta-verse, leading to an increase in metaverse land sale numbers. For instance, a whole commercial area called Metajuku, modelled after Japan’s Harajuku, was purchased for $913,000 (over R16m) in the metaverse. 

In addition, as celebrities and influential figures enter the metaverse, young people are also encouraged to become digital real estate owners. For example, news of a plot of land selling next to Snoop Dogg’s development in The Sandbox (a metaverse) for $450 000 (about R8,2m) made headlines when the purchase was made some months ago.

Last July, Sotheby’s launched a virtual art gallery replica of its London gallery in the Voltaire Art District of Decentraland (a metaverse). According to Republic Realm’s 2021 Metaverse Real Estate Report, in 2021, metaverse real estate prices approached real-world levels as the metaverse entered mainstream interest. 

“Enough people believe that this virtual real estate is scarce and holds value that they are spending meaningful amounts of money on it. For this reason, its ownership has become something of a status symbol among early adopters,” says the report.

“Beyond status, ownership represents something greater – a contribution to the fabric of the metaverse community. Where and how metaverse real estate is developed has an enormous impact on how players will interact with it. They become spaces where people can engage, explore, build, and socialise, mimicking real-life social interactions while also driving up the land’s value.”

The average price per parcel of land in the metaverse is currently between $10,000 (R183,000) and $15,000 (R275,000). By November 2021, $186,302,763 (over R3,4bn) had been spent on metaverse real estate purchases. On December 19 2021, over $70 million (R1,2bn) of metaverse real estate had been sold for the month. At the time of writing, the most expensive virtual land purchase in metaverse history was $4,3m (almost R800m).

Though trends differ, it is noteworthy that according to new research conducted in the UK by metaverse platform Virtua, over half (51%) of Gen Z think digital real estate will provide a more significant return on investment than brick-and-mortar properties in five years.

As Gen Z and Millennials become more engrossed in the virtual world and spreading their money between NFT and real-world expenses, it is clear that between millennials and Gen Z, there is a shift in how people choose to invest their money – and real-life real estate companies may be in for some stiff competition with the metaverse in the next few years.

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