The latest research report from the State of Luxury Real Estate by Luxury Portfolio takes a deep dive into the luxury home market to really understand affluent clients’ preferences.
Information collected is based on demographics, lifestyle preferences, decision-making factors, real estate portfolios, agent selection, and media consumption habits.
Women account for 54% of luxury homeowners under 35
One of the key findings shows that although men make up the majority of owners aged 35-64, women actually account for those under 35 years old, indicating a growing female presence in the luxury real estate market.
When it comes to education, younger luxury homeowners tend to be well-educated, although compared to their middle-aged counterparts whose degree levels are higher, their academic achievements are still pretty impressive.
With more younger people purchasing luxury homes, high-end brands outside of real estate are understanding the shift in the demographics and have started to use marketing strategies to specifically target this clientele.
Today’s young professionals accumulate wealth earlier in their careers
Young professionals today are managing to acquire luxury properties faster than the previous generations thanks to industries such as technology and finance that are high-paying and booming!
The younger generations are becoming more and more aware of real estate investing, especially with financial education and literacy being emphasized today. They even prioritize real estate investing over travel and luxury goods.
Today, younger buyers can secure mortgages and enter the housing market with historically low interest rates, despite 2023’s rates.
Young affluent buyers prefer eco-friendliness and sustainability
New data has revealed a shift toward sustainable practices and wealth preservation for generations to come. The younger luxury home demographic prioritizes eco-friendliness and actually prefers to use reusable bags and water bottles.
Luxury brands are adopting these ideas and combining luxury fashion with eco-friendliness. These brands acknowledged that for continued interest, they must continue to offer unique, environmentally friendly items.
Homeowners under 35 own more extended family properties than those over 35
Although luxury homes are popular among both young and middle-aged affluent buyers, younger buyers prefer large family homes, college properties, and weekend retreats (which has emerged as a new status for luxury homeowners under 35).
Virtual land investments, like Decentraland, where digital real estate is bought have attracted more affluent consumers compared to older ones and as luxury brands adapt to this revolutionary take on real estate, the gap between younger and middle-aged investors in digital real estate is expected to widen even more.
The future of luxury real estate will take shape based on the different age groups’ preferences because as the world embraces new forms of luxury, the investment preferences of luxury homeowners will follow suit.
A strong online presence for agents is crucial to appeal to clients
Technology in the luxury real estate market is rapidly evolving and younger buyers (under 35) tend to prioritize technology and brand – meaning they are more likely to look at brand affiliation when choosing a real estate agent, while older buyers focus on the real estate agents knowledge of the local market.
What remains popular between both age groups is referrals from friends and family, when searching for a real estate agent. So trust is very important.
Online property photos and videos are very important to clients
Live-streaming videos are popular among luxury buyers but for both younger and middle-aged buyers, in-person visits still are preferred and remain consistent.
Regarding social media, younger buyers find it the most effective platform for video advertising and high-quality image usage.
Buyers under 35 value the professional advice of real estate agents and they also appreciate a professional tone and a polished image.
High-quality customer service matters along with originality and exclusivity
Social responsibility is more important for younger buyers, compared to their middle-aged counterparts, because they are concerned with the environment and want to ensure that the company they are supporting values the environment as well.
Statistics also show that younger buyers appreciate unique experiences and prefer exclusivity and will go for items that are limited and rare.
Affluent buyers connect with those who share the same lifestyle
Whether in real estate or any other sector, it’s important to understand luxury businesses across various sectors to get a good idea of customer loyalty.
Luxury buyers place high importance on quality and stylish designs, value personalized customer service, and tend to connect with others who share the same affluent lifestyle.
Real estate professionals should stay informed about trends and shifts across all industries when it comes to preferences for brands.
Final Thoughts: Embracing change for future success
A demographic shift is happening as younger generations are increasingly entering the market and are prioritizing originality, exclusivity, social responsibility, and technology.
Real estate professionals should be prepared to adapt to what their target audience is leaning more toward, and their marketing strategies should focus on providing personalized experiences to their clients.
Read the report: Luxury Portfolio International: State of Luxury Real Estate 2023.