As the multifamily sector continues to grow, Gen Z (those born between the mid 1990s and the early 2010s) is fueling this demand and influencing investor’s strategy in numerous ways. For investors asking “Is it the right time to Invest in multifamily real estate market”, Gen Z is influencing this market in a number of ways. Let’s explore how Gen Z, popularly known as the loneliest generation in the world, is forecasted to be the new darling of the multifamily real estate world.
Multifamily is all set to be dominating the real estate market for decades to come, one look at the investment sales data in the U.S. confirms this. Since the start of the pandemic in early 2020, multifamily sales have comprised 42% of all CRE transition activity in the investment sales market—up from 35% in 2019. Multifamily sales went up by 75% from 2019, totaling $320 billion.
In a new report submitted by Cushman & Wakefield, as the multifamily market undergoes a tectonic shift, GenZ will quickly supersede Millennials (people born between the early 1980s and the mid 1990s) as the largest rent-paying legion. As per Cushman & Wakefield, it was estimated that there were 100 million renters in 2015, of which 48% were Millennials. By 2020, the Millennial share had already fallen to 37% as Millennials have increasingly transitioned to homeownership while GenZ rapidly grew to 18% of renters. This is just the beginning. By 2025, Millennials and GenZ will represent the same percentage of renters and by 2030, GenZ will storm to acquire the largest share of renters in the U.S.
Since GenZ is practically kept out of the real estate market for a plethora of reasons like sky-high homeownership rates, soaring interest rates, and student debt, GenZ is most likely to be opting for being renters offering a stellar opportunity for multifamily real estate boom in the near future. Another strong reason GenZ is opting to rent over buying is they are choosing to live alone more often than Millennials.
A sole-person household is when a person is living alone in a separate housing unit, as a lodger, or in a separate room of a housing unit. The trend for sole-person households is growing exponentially from Baby Boomers (people born between the mid 1940s and the mid 1960s) and Millennials and it is no surprise that GenZ is also mirroring the same. With the rise in sole-person households and barred entry for house ownership, it is the biggest, boisterous indication that GenZ’s requirement for multifamily real estate will skyrocket.
The Organization for Economic Cooperation and Development (OECD) projects that the number of sole-person households will increase by 35% from 2000 to 2025. Renting allows this demographic more flexibility, while homeownership is more cost-prohibitive for a single-income household. This raises the question, ‘Is it the right time to invest in multifamily properties?’ and the answer is yes. Read on to know how the multifamily market is influenced by Gen Z’s demands right now.
It also presents an opportunity for epic value-added opportunities. Since GenZ is the only generation that is native to the internet, they require technology implementation in every nook and corner of their houses which implies unique and new value-add strategies in which Crown Capital exceeds greatly. Augmentation of the latest and smart technology is crucial to appeal to this generation along with communal spaces, seamless connectivity, and pet inclusivity. More than that, GenZ is the only generation that is extremely touchy and sensitive about environmental issues, offering scope for value-add strategy to have sustainable multifamily properties.
If you’re looking to invest passively and generate appreciating long-term wealth, have consistent cash flow, and get big tax benefits this is the perfect time for you to invest in multifamily real estate. With the emergence of this ‘stay at home’ GenZ and with more and more people opting to work remotely, a huge surge of multifamily real estate is expected to happen in the coming times. The internet is flooded with data and statistics to prove the same as the leading economists and multifamily real estate investors are excited for GenZ to completely revolutionize the multifamily housing market in the U.S.
They say that common sense isn’t common. Well, the wind is directly pointing us in the direction of an ascending growth of the multifamily real estate market and it would be downright sheepish to turn a blind eye to it. It is only the smart and farsighted that would be ready for it.
If you want to grow your wealth and see an extremely bullish run while being a passive investor in real estate then all pointers direct us towards multifamily real estate investments. With trusted syndication like Crown Capital with a huge backload of experience and prior investments, your funds are sure to be in safe hands to witness skyrocketed growth!