Chamber member Marcos Drummond, from Vic Properties, explains why Portugal is ripe for The Great Wealth Transfer, as parents leave their assets to their Millennial children, turning them into alpha-buyers of property and other wealth preservation items such as investments.
Simultaneously, they (we?) are also the most open minded, culturally and environmentally aware, purpose driven, connected generation ever. Now coming of age, many of these highly educated digital natives, which are known to have generally high-standards – the other side of the entitlement coin – are growing into senior and even managerial positions, taking them beyond mere financial independence into the affluence of relatively high disposable income.
Mix these together, and you get a growing demographic of high earners with equally high expectations of where and how they want to live, now entering their prime spending years.
But hélas, valuing experiences over ownership has made Millennials spenders rather than savers, and the price of that nice home they want combined with the current high % of equity required to qualify for a bank mortgage is still preventing them from getting on the property ownership ladder, like their parents did decades ago. So they rent, and spend, for now.
Funnily enough, their parents, once idealistic and ownership averse – with their hippie and long-haired youth photos to prove it –have ended up owning the largest amount of wealth in the history of the world. Over 10 times the average current net worth of their children.
A significant chunk of it is set to be passed on to Millennials between right now and 2040, and given the lower number of heirs per family ever, concentrated like never before. A phenomenon which Forbes described as The Great Wealth Transfer. These “instant savings” are expected to turn Millennials into alpha-buyers of property and other wealth preservation items such as investments. A behavioural shift such as the one their parents experienced is inevitable.
With one key difference, especially since the start of the pandemic, many of them can work from anywhere so unlike their elders don´t need to reach retirement age to move wherever they want.
In Portugal we are already seeing this shift in profile, and, as an example, for each UK pensioner moving to the Algarve, there is a UK working Millennial seeking the appealing lifestyle of Portugal with the buzz, convenience and ease of movement only a major city like Lisbon can give them.
Tenants or buyers, local, nomadic or inbound, Millennial property seekers bring change. Demanding quality, value, ethics, comfort, sustainability and new ways of living their homes and neighbourhoods. New residential projects, designed holistically for fresh urban destinations, in black canvas prime land such as Lisbon´s Upper Riverfront in Marvila – home of the award-winning Prata Riverside Village and other upcoming projects – have to foresee these expectations of future buyers and deliver on a cohesive forward-facing vision, wonderfully executed.
The Millennials are here. Welcome.
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