Shanghai, November 11, 2016
– Chinese millennials, mostly the post 80’s and 90’s, represent a rapidly growing source of labor and consumption as well as the most influential demographic framing future trends in China’s real estate sector. CBRE’s report on this demographic, Millennials: Shaping the Future of Real Estate, provides an in-depth view of how their live, work and play priorities and habits will shape economics, redefine opinions on workplace design and functionality, and drive new attitudes towards consumption and experience for the foreseeable future.
Chinese millennials aspire to own their own home but rising property prices post challenges
Around 61% of China’s millennials are still living with family due to both cultural norms and high property prices, but almost half of them intend to move out within 2 years. 57% of Chinese respondents retain a strong desire to buy property in the future no matter that they’re currently living with parents or renting. As the high cost of housing, parental support becomes indispensable. More than 2/3 of home-owning respondents claimed that they received financial help from parents.
“Millennials in China choose to rent after moving out of their parents’ houses, due to the high property price, but they do aspire to own a house. Developers and city administrators shall take heed of these trends by constructing more affordable housing for rent and sale. Small, modern and practical units which provide good amenities and accessibility would be ideal for millennials. In addition, their requirements for high-quality facilities and experience will drive the demand for long term rentals of white-collar condo and apartment for singles.” said Sam Xie, Head of Research, CBRE China.
Health-conscious millennials place high importance on workplace environment
Millennials' presence in the workplace is steadily increasing and serves as evolving demographic influencing decision-makers in the business world. While salary and benefits are still the main draw when considering a job, Chinese millennials also place importance on workplace environment. 81% of respondents believed that high-quality office design and layout can have positive impact on their working experience. They also displayed stronger demand for rest areas and canteen, underlining the general focus on work-life balance and personal well-being.
Millennials view their offices and its immediate surroundings as a community where they can relax, socialize and engage in other activities. Companies should strive to create a physical workplace environment that satisfies millennials' high expectations. People-centric workplace strategies that embrace diversity can keep young talent happier, more engaged and more productive.
Chinese millennials to increase spending on leisure activities; shopping experience in bricks-and mortar venues irreplaceable
Millennials in China still maintain good saving habits and manage to put away 22% of their income in savings, reflecting their mindset of focusing on saving especially in pursuit of homeownership. Over 1/3 of the income is spent on non-food shopping (e.g. clothes, electronic goods etc.), going out (e.g. eating out, cinema, bars, clubs etc.), sporting activities (e.g. watching/playing sports, going to the gym etc.).
The survey shows that Chinese millennials are most optimistic about their future spending and they are willing to increase discretionary spending, particularly on leisure activities. They eat out at an average of 5.9 days per month, go to the cinema or live events for 4 days and go non-food shopping for 2.7 days in shopping malls. 25% of the respondents considered “see and feel the products” as the primary reason for shopping off-line in physical stores.
Physical retail, particularly shopping centers, that provide new experiences and socializing environment are considered irreplaceable. To leverage this trend, retailers are recommended to increase the experience-based element of their offering and focus on providing an environment for visitors to socialize and relax. In addition to increasing F&B, cinema and entertainment elements in their shopping malls, more live entertaining events could be the key to attract young millennial consumers.
* In December 2015, CBRE conducted a global survey of 13,000 millennials globally--between the ages of 22 and 29, including1,000 from mainland China out of 5,000 from Asia-Pacific millennials.