High property prices in the region are preventing millennials from buying their own home.
Two in three young adults in Asia Pacific aged between 22 and 29 are happy to live in the family home until they have the financial capacity to live independently, revealed a CBRE survey.
CBRE attributed this mindset to “cultural practices in Asia, where parents usually house their sons and daughters until they get married”. The results showed that India and Hong Kong have the highest proportion of millennials still living at home, while Australia has the lowest.
High property prices are also a major factor preventing the region’s millennials from leaving home.
“Surging property prices are outstripping wage growth and making it extremely difficult for Asia Pacific millennials to accumulate the necessary capital to buy their own home. Most respondents said they are forced into renting homes due to being unable to buy them,” said CBRE.
But while two in three Asia Pacific millennials living on their own are renting a property, many aspire to own their own home, with 65 percent of respondents looking to buy a property in future.
Millennials from India and China have the strongest intentions to acquire their own property in future, although their motivations differ. Those from China cited stability as the key driver for purchasing a home, while those from India indicated investment as their main reason.
Millennials from Japan displayed the lowest buying intentions, primarily due to low earnings as well as a preference for the convenience of renting. In fact, Japan was the only country in the survey where no respondents had bought a property for investment.
Of those intending to buy a home, 40 percent indicated that they would need financial assistance from their parents or relatives, a practice most common in China and Hong Kong, where buying a home is considered a prerequisite for marriage.
When purchasing a property, the survey found that most Asia Pacific millennials will not buy a home until they find one that meets their standards in terms of location, quality and size.
“Developers and city administrators should take heed of these trends by constructing more affordable housing for rent and sale,” said Dr Henry Chin, Head of Research, CBRE Asia Pacific.
“In response to the challenges for millennials to accumulate capital for down payments, there needs to be innovation in structuring mortgages for young first-time home buyers.”
CBRE surveyed 5,000 respondents in Australia, China, Hong Kong, India and Japan for the report.