MILLENNIAL MARKET: Spain’s rental sector is spiralling out of control

MILLENIALS have been accused of being many things, from work-shy and over-dependent on technology to easily-offended “snowflakes.”
And now experts have concluded this generation- broadly agreed to cover anyone born between the early Eighties and mid-Nineties-  has even affected the way the housing market works.
At the recent Real Estate Forum, property experts warned how attitudes of those aged under 38 towards work, money and responsibility were creating shifts in Spain’s rental and property development sectors.
While the housing market continues to boom here generally, developers say they are concerned the rental sector is spiralling out of control, with millennials often reluctant to put down permanent roots.
According to one publication, only 15 per cent of buyers are aged under 38. Mostly graduating school or university during the middle of a recession, many millennials have found opportunities to get their foot in the door in preferred jobs limited.
Experts say this in turn has created an emphasis on enjoying the now rather than saving for later, fuelling a generation heavily reliant on renting.
Alberto Valls, a financial advisor partner at consultancy firm Deloitte, explained: “Given this situation, in Spain a reform is urgently needed to professionalize the offer and the management of the rent.”
And as technology continues to grow, so does the rate at which millennials use the internet. Marcos Foncuevas, manager of Valdebebas, a new development in Madrid, says this is shaping the way young people spend money generally, explaining: “They have everything online and can compare everything.
There is no physical store that can compete, so now the challenge of any shopping centre and any business in it is to offer chances and experiences that can compete with the speed of the internet.”
Experts also agree increasing tech-savviness may shape the way new homes are built, with developers choosing to include “smart” systems or offer the use of virtual reality simulators to help advertise their homes.
Foncuevas says millennials are also less likely than previous generations to hold traditional office-based jobs, creating a need to think about the layout of new developments.
He explains, “we must remember that millennials invented the collaborative economy. And this, beyond Uber or Airbnb, suggests that they need new services from buildings. From co-working spaces in the same development, to areas which combine leisure and work.”
All this begs multiple questions about the changing face of Spain’s property market, from what impact rising rental rates will have on house prices, homelessness and the age at which young people leave home, to whether the smart homes might be the investment property of the future.