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As Gen Z comes of age, they’ve made a name for themselves by questioning the legacy systems previous generations have accepted as the norm.
But, Zoomers do more than cast shade at their predecessors. They demand better. If something is broken, they will push to fix it.
Their influence is causing seismic shifts across industries from luxury retail to transportation. And with Gen Z’s purchasing power expected to grow to $33 trillion over the next decade, it’s no wonder marketing, political and entertainment sectors alike are paying attention to them.
Now Gen Zers are shifting their focus to industries that have locked them out, like real estate investing.
In the United States, commercial real estate is rebounding quickly to pre-pandemic levels. Meanwhile, commercial real estate in Canada is on track to post a record of nearly $50 billion in investments this year. But while Zoomers want to own a home, like the millennials before them, the cost of entry is too high. The average price of a home in the U.S. soared by an unprecedented 24%.
Here’s how Gen Z is finding a way in and revolutionizing real-estate investing in the process.
Related: 10 Pieces of Financial Advice I Wish I Knew in My 20s
They’re redefining home ownership
Zoomers have watched millennials struggle with a wage gap that’s made home buying in its traditional sense, unattainable. Compared to Baby Boomers at the same age, millennials own eight times less American real estate and spend 39% more on a first home. Faced with the same challenges, Gen Z is marking their fate by redefining what homeownership means.
Instead of purchasing a home to live in, they’re leveraging crowdfunding and the sharing economy to take ownership in houses, buildings and even commercial properties for as little as $1. Simply put, they’ve realized being a homeowner doesn’t mean they have to live where they’ve invested. In fact, there are advantages to not going all-in on one property.
In traditional homeownership, the process is stressful, drawn-out and brings heaps of responsibilities like mortgage payments, property tax, maintenance and insurance.
By not living where they invest, Gen Z is realizing the benefits of a lucrative long-term investment without giving up the freedoms they enjoy now: tickets to an unforgettable concert, a closet full of luxe yet sustainable fashion, dinners out, travel and the latest gaming system. They get the capital appreciation while someone else deals with landlord responsibilities.
Related: This Multimillionaire Millennial Shares the Top 3 Business Mistakes His Generation Makes
They’re prioritizing transparency and community
Realizing real-estate investing is no longer reserved for the wealthy elite, Zoomers are bringing the market out from behind locked doors and into the community.
The pandemic helped spark new interest in investing. Confined to their homes and concerned about their future, young investors took to their devices to educate themselves and make their money work for them.
Instead of looking to legacy financial institutions for help, Zoomers are building online communities on Reddit and Discord and using their influence to educate their peers on what they learn on TikTok. These online communities allow Gen Z to ask questions in a way they’re comfortable with, lurk and engage on their own terms.
Ever-mindful of the power of tech to disrupt how 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 authority takes a backseat to the community.
Under Gen Z’s influence, exclusivity is out; inclusive investing is in.
They’re sharing the wealth
Gen Z wants everything from their employers to their purchases to reflect their values – and real-estate investments are no different. Instead of thinking of how their purchases can benefit themselves, they’re 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 105 unit rental 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 an act of activism, changing the world through purchase power – and that’s a good thing.
When people are shut out from an entire market, they get the message that the future they dreamed of isn’t possible. Feeling like you can never get ahead takes a toll on mental well-being. But it can also create broader societal disillusionment.
I’ve heard from people who have detached themselves from local politics, quit watching the news and no longer exercise their civic right to vote. But that’s changing with Gen Z. Indeed, 66% believe communities are created by causes, not by things like economic background or level of education. It’s not an option to keep up business as usual.
Let’s face it: The path to property ownership was due for a makeover. For too long, entire populations have been left out of real-estate investment. But ready or not, thanks to the cultural shift demanded by Gen Z, that’s changing. If we follow their lead, we can look towards a future where ownership is possible for anyone who feels compelled to invest in their community.