Wording – Chrissie JohnsonAn interesting fact shared during a Lightstone webinar recently was the statistical tracking of a rental trend during the past year in South Africa, which is also reflected globally, that the younger generation prefers to rent rather than buy. Coined as Generation Rent, they are prioritising lifestyle, flexibility (which includes moving frequently to further their careers) and not wanting to commit to long term financial obligations or the hassles associated with property ownership.
Generation Rent is a sector made up by a high percentage of Millennials (born between 1982 and 1996) and some Gen Z (born between 1997 and 2012) who, having grown up during a period of relative upheaval, have a very different attitude toward life and priorities – including the desire to maintain a good work/life balance, travel, and wellness.
Renting supports Generation Rent’s desire to stay within their budgets, gives them the ability to come and go as they please, plus they also have higher expectations regarding customer experience than the generations before them. From their landlords, they are looking for great communication, with the ability to text and email to converse and express their concerns. Data is also showing they also want flexible rental terms. Month to month and short-term options are often attractive, as are options for furnished short-term rentals, as this gives them the ability to move in and start living the low maintenance lives, they crave. Additionally for rental companies, delivering seamless, hassle-free customer experiences is what they require.
Interestingly rental properties aren’t the only thing popular among millennials. Retail rentals are also among this modern trend. Millennials share their homes using AirBNB, they share cars with Lyft and Uber, and overseas they share goods like clothing and furniture with companies like Rent the Runway and CORT Furniture Rental. This allows them to rent products on subscription since they only want items for a short time. They want the flexibility of upgrading, swapping items, no maintenance worries and no hassle with the inevitable discardment.
While opinions on the extent of this situation varies, it is important to recognize the growing preference of Millennials and Gen Zs to rent, rather than own, everything from electronics to homeware, furniture, leisure equipment and even clothing. It is also anticipated that this trend is set only to grow.
The rental economy is best described as a transactional model that allows for the use and enjoyment of a product, without the risk and responsibility associated with traditional ownership. It’s a concept that is booming internationally, thanks to a growing preference among Millennials and Gen Zs for “access over ownership”. Additionally companies are now starting to notice “the growing population of consumers who are willing to pay good money for the privilege of not having to own something”.
Perhaps we will soon see companies in South Africa also starting to tailor offers to suit this model of consumption.