Millennials are well-known as the generation that has shunned ownership of anything and has preferred to spend their money on experiential purchases - like international travel, eating out and going to Coachella (as an example).
But after this global pandemic - will the mindset of Millennials shift towards valuing property buying and home furnishings?
According to an article originally published on Bloomberg:
'One of the lasting effects of the Great Recession was a shift in consumer preferences from things to experiences.
Homeownership, especially among millennials, fell out of favour amid distressed personal finances and changes in mortgage regulations while the rise of smartphones, social media and services such as Uber and Airbnb nurtured a consumer culture focused on dining, travel and events. A post-coronavirus, pre-vaccine world will upend this lifestyle, which will likely be replaced with the consumption patterns of older generations. As long as social distancing and fears of getting the virus persist, consumers probably will spend more on the trappings of their homes rather than services and experiences involving public spaces and crowds.
The joys of travel won’t be the same, between the increased health risks and the decreased number of dining and entertainment options. In the aggregate, this will mean lost economic output and employment, and for individuals it will mean a lot fewer experiential things to spend money on.
Although some of that lost consumption might be saved, a lot of it will be spent where it can be — and for a lot of consumers, that will mean spending on their homes. Instead of going to bars and restaurants or jetting overseas, upgrade your kitchen and or bathroom. If large live concerts or sporting events are out for a while, upgrade your sound system and television. Instead of travel, buy new furniture or build a deck and patio area in your backyard.' - via
The winners and losers?
The Cape Town property market - especially on the Atlantic Seaboard - has been in a recession for a few years now. Foreign buyers and well-heeled investors from Joburg have dominated the buying scene in this area for a long time.
This crisis may well be the catalyst for a reversal of that trend.
Businesses that are also associated with home ownership and the increase in remote working from upgraded home offices will also benefit in the foreseeable future.
Sadly this insight doesn't bode well for the tourism industry in Cape Town. Due to relatively affordable prices and our unique attractions, Cape Town as an international destination should recover faster than other less compelling destinations, but time ahead for the sector are going to be really tough.
If you are in the tourism or hospitality industry - now is the time to innovate and redesign your business model. You might get government assistance for a couple of months which will keep you going, but if your long-term survival is important to you, you'll need to redesign your offering for a brand new set of future circumstances.