LUXURY PROPERTY AND THE CHILDREN OF THE REVOLUTION
How the Millennial and Gen Z generation have impacted the luxury property sector.
There are now more UHNWIs than ever before, with more than 25 million millionaires worldwide. In London alone, the number of Millennials and Gen-Z UHNWIs has increased by over 50% in the last five years, a trend which is expected to continue.
The rise in private wealth amongst the Millennial and Gen Z generation has the potential to completely re-shape luxury property for the future. The new wave of multi-millionaires are cash rich but time poor and delivering luxury as efficiently as possible is essential. They are looking at their homes as not only a place to live, but also somewhere that is tailored to their personal needs and wants, and – as such – they are willing to pay for it.
This generation are more mindful, sustainable, technologically savvy, and place more importance on health and wellbeing – and they require their homes to reflect their lifestyle. Millennials and Gen Zs also expect carefully curated pieces, Instagrammable spaces, sustainable materials and smart home technology which is state of the art and easy to use. They wish to be located in vibrant neighbourhoods with amenities, local culture and green spaces all close by.
While some property, construction and design brands have stood the test of time, it is the agile and adaptable brands that will excel with this new and discerning generation. Thanks to the power of social media and influencer mentality, super-prime homes still need to deliver the highest quality, but they will need to bring something unique to the table. This does present challenges, but it will also allow for innovation and creative thinking.
So what impact has this generation had on luxury property? To find out, The Luxury Property Forum invited Megan Steele-Knowles, Brand Director and 11 other respected individuals from across the industry to offer their insights and perspectives…
Have you seen any notable trends or shifts in the priorities your Millennial and Gen Z clients when designing, constructing, or buying their homes?
Yes, and it’s quite evident that our newer generation of clients have three main focuses when designing their homes: Technology, Wellness and Sustainability. There has been a cross over with the previous generation, but this group are fully immersed and committed to these priorities.
With Technology, it’s not just about incorporating state of the art technology into the overall DNA of the property – with the installation of speaker systems, smart lighting, and even air purification systems – but we’re also seeing a rapid acceleration in dedicated high-tech spaces with our younger clientele. These include home offices, coding rooms, security rooms, gaming and cinema rooms and even underground car garages. High-tech subterranean storage systems are particularly popular with our wealthy London-based clients. This makes a lot of sense given how rare parking is in the Capital, but also a savvy investment opportunity given the minimal depreciation that classic cars/ supercars have. The coding rooms has been a very interesting rise, particularly if our millennial clients have children themselves.
Wellness spaces such as Spas and Gyms has been standard practice in the homes of HNW and UHNW clients for some time, and we are seeing an increased focus on this with Gen Z and Millennial clients. In a post covid climate, consumers are moving away from memberships of elite clubs such as Equinox and are favouring a more convenient and private set up in their own home incorporating the latest technology and wellness trends.
Lastly Sustainability, particularly as Gen Z come of age there has been a huge shift in the importance of sustainable living, with zero tolerance towards greenwashing. This generation are willing to pay more for sustainable and ethical products and are more inquisitive of product origins, the material of goods, and their social impact. Transparency and accountability are paramount, and companies must take sustainability into consideration in all aspects of their business.
Ultimately, millennial and Gen Z clients are the generation of urgency and we have noted this recently when setting construction programmes. Methods that save time, regardless of if they are more expensive, seem to be increasingly appealing; something that is quite contrasting from the generations.
Has there been a shift in the market share of Millennials and Gen-Z clients and how has that impacted your business strategy?
Since 2021, 15% of all Knowles projects are with Millennial clients aged 39 and under and contribute approximately 22% to annual turnover. This percentage is continuing to grow with some very exciting projects in 2023 and 2024.
There will be the need to adapt and improve. What can the luxury property industry do to adapt in order keep up with the emergence of this new discerning generation of consumers?
Millennial and Gen Z clients are savvier than ever, and it will be essential for companies to adapt with this cohort in order to stay competitive. As a digitally sophisticated generation, they have the skills and know how to obtain information instantly, and companies must be able to keep up.
This requirement has pushed many in the luxury property industry, particularly construction companies, to modernise their practices. It is essential that companies invest in optimising digital platforms and devote resources into marketing and their brand presence. This will be more valuable than ever before to ensure visibility to this clientele and appeal to this generation of consumers.
There has been a shift in the approach to the marketing of the super prime construction industry. Following the likes of fashion, and now the real estate/ property, the construction industry needs to engage directly with their consumer through content on various platforms such as Instagram, Facebook and LinkedIn. And slowly we are beginning to see TikTok being tapped into. Due to the success and scale of the platforms that are now available, social media is giving way to a more engaging, dynamic, and authentic marketing style which allows for a wider reach of audiences. However, content is key for this generation and still images are no longer enough. They want to see exciting video content such as previews, timelapse or interviews that capture a short attention span. This is essential for professionally built films to really sell to this market.
The importance of how your internal collateral looks is vital too, ensuring it is constantly evolving and refreshed. You need a strong website, a live and active social media presence, and investment in digitized collateral, such as brochures, videos, and pitch decks, is key.
From a people perspective, companies should look to recruit, train, and build a strong younger generation of employees. It is essential to invest in our people and curate a dynamic and diverse team who Millennial and Gen Z clients can relate to and communicate with effectively. These employees are in the best position to provide insight to what their generation wants from a business.
The full paper can be found via the Luxury Property forum – click here to read.
The luxury property experts are:
- Sally Maier-Yip, Founder, 11K Consulting
- Esra Kumbasar, Design Director, Accouter Group of Companies
- Robert Kerr, Director, ADAM Architecture
- Ed O’Donnell, Co-Founder, Angel O’Donnell
- Abby Ghafoor, Founder, Arc Management Consulting
- Jo Eccles, Founder & MD, Eccord
- Charu Gandhi, Director, Elicyon
- Megan Steele-Knowles, Director, Knowles
- Andrew Paulson, Partner, Lees Associates
- Corin Hawthorne, Business Development, OKTO Technologies
- Charlie Willis, CEO, The London Broker
- Helen Darlington, Director, Woven Agency