Cultural habits as well rising property prices in the Asia Pacific region mean fewer working millennials are buying their own homes, according to a survey by real estate services firm CBRE Asia Pacific.
According to the survey, 63 percent of millennials in Asia Pacific still live with their parents, higher than the global average of 49 percent.
The survey characterized millennials as those who were born during the 1980s to the mid-1990s. The respondents of the survey were aged 22 to 29.
“This is largely due to cultural practices in Asia, where parents usually house their sons and daughters until they get married,” CBRE said.
Among those not living at home, 23 percent of the surveyed millennials are renting, while eleven percent own their own property. This is lower than the global average of 33 percent and 15 percent, respectively.
CBRE noted that the high cost of residential properties in many markets is also a factor in the lower percentage of property ownership
“Surging property prices are outstripping wage growth and making it extremely difficult for Asia Pacific millennials to accumulate the necessary capital to buy their own home,” the report said.
71 percent of the respondents said that wages are not keeping up with property prices, according to the report.
“Most respondents said that they are forced into renting homes due to being unable to buy them,” CBRE said.
CBRE said that 65 percent of millennials who are renting properties still plan on buying a home in the future.
“Those who are still living at home and plan to move out in the future also retain a strong desire to buy their own property,” the report said.
The real estate advisor suggested developers and city administrators need to construct more affordable housing to be able to meet the needs of the millennial generation.
“In response to the difficulty millennials encounter in accumulating capital for down payments, there needs to be innovation in structuring mortgages and home ownership schemes for young first-time homebuyers,” CBRE said.
Moreover, the survey also revealed that millennials are unwilling to sacrifice their living standards when buying a property. This means that most of them will not purchase a home until they find one that meets their standards in terms of quality, size and location.
“Small modern and practical units providing good amenities and accessibility would be ideal for millennials,” the report concluded.