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With Generation Z coming of age, they’ve made a name for themselves by questioning the old systems that previous generations accepted as the norm.
But, Zoomers do more than just cast shadows on their ancestors. They ask for better. If something is broken, they will pay to fix it.
Their impact has caused seismic shifts across industries from luxury retail to transportation. And with Generation Z’s purchasing power expected to grow to $33 trillion over the next decade, it’s no wonder that the marketing, politics and entertainment sectors alike are interested in it.
Now Gen Zers are shifting their focus to the industries that held them back, such as real estate investing.
In the United States, commercial real estate is rapidly rebounding to pre-pandemic levels. Meanwhile, Canada’s commercial real estate is on track to post a record-breaking $50 billion in investment this year. But while Zoomers want to own a home, like millennials before them, the cost of entry is very high. The median home price in the United States has increased by an unprecedented 24%.
Here’s how Generation Z is finding a way to revolutionize real estate investing in the process.
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They are redefining home ownership
Zoomers have watched millennials struggle with a wage gap that has made home buying in its traditional sense elusive. Compared to baby boomers of the same age, millennials own eight times less US real estate and spend 39% more on a first home. Facing the same challenges, Generation Z is defining their own destiny by redefining the meaning of home ownership.
Instead of buying a home to live in, they take advantage of crowdfunding and the sharing economy to gain ownership of homes, buildings, and even commercial real estate for just one dollar. Simply put, they have realized that being a homeowner does not mean that they have to live where they invested. In fact, there are advantages to not getting involved in one drug.
In traditional home ownership, the process is cumbersome and lengthy and causes a lot of responsibilities such as mortgage payments, property tax, maintenance and insurance.
By not living where they invest, Generation Z realizes the benefits of long-term profitable investing without giving up the freedoms they now enjoy: tickets to an unforgettable concert, a wardrobe full of luxurious and sustainable fashion, dinners out, travel, and the latest gaming system . They get the capital appreciation while someone else handles the responsibilities of the owner.
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They prioritize transparency and community
Real estate investing is no longer reserved for the wealthy elite, Zoomers are working to bring the market out behind closed doors into the community.
The pandemic has helped spark a new investment interest. Confined to their homes and worried about their future, young investors turned to their devices to educate themselves and make their money work for them.
Instead of looking to old financial institutions for help, Zoomers are building online communities on Reddit and Discord and using their influence to educate their peers about what they are learning on TikTok. These online communities allow Generation Z to ask questions in a way that is comfortable for them, hide and participate on their own terms.
Always realizing the power of technology to disrupt the way things have traditionally been done, they are using the internet to democratize investing and bring their peers into the fold. Transparency is the priority and power takes a back seat to the community.
Under the influence of generation Z, the singularity was excluded; comprehensive investment in.
They share the wealth
Generation Z wants everything from their employers to their purchases to reflect their values — and real estate investments are no different. Instead of thinking about how their purchases will benefit themselves, they are looking at how they can benefit others and the world around them.
I saw this recently when a community of young investors teamed up to invest in a rental of 105 units in Mission, British Columbia. Designed and built for long-term rental housing, it will also include 11 affordable housing units. Consumption is being redefined as the act of activity, changing the world through purchasing power – and that’s a good thing.
When people are barred from an entire market, they receive the message that the future they dream of is not possible. Feeling that you can never move forward negatively affects your mental well-being. But it can also create broader societal disillusionment.
I’ve heard of people who have separated themselves from local politics and left watching the news and no longer exercising their civic right to vote. But that changes with Generation Z. In fact, 66% believe that societies arise from causes, not by things like economic background or education level. It is not an option to continue business as usual.
Let’s face it: The road to property ownership was due to change. For a long time, entire populations were excluded from real estate investing. But ready or not, thanks to the cultural shift that Generation Z is demanding, that is changing. If we follow their leadership, we can look forward to a future where ownership is possible for anyone who feels compelled to invest in their community.
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