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Why has the pandemic pushed millennials to ask for credit to buy a house?

The coronavirus pandemic accomplished what for many desperate parents was an impossible mission: getting their children between 26 and 37 years old « to leave the nest. »

People born between January 1983 and December 1994 participated with between 50 and up to 78 percent of obtaining financing for the purchase of a home, despite the economic impact of COVID-19 on Mexican families.

“After this crisis, millennials should no longer be considered a generation in a young phase. Their participation ranges from 50 to 78 percent of real estate dynamism during the pandemic, this shows us that it is the target population group, ”said Leonardo González, Real Estate analyst at Propiedades.com.

He reported that only so far in 2020, this generation – mostly men – reached a total amount of more than 77 billion pesos in financing for a property, while those who receive 12 times more than the minimum wage is 20 thousand million pesos higher.

For his part, Alejandro García, Marketing Director of Inmuebles24, said that there is even a large population between 18 and 24 years of age who tripled their participation in the search for housing in recent months: “only in October we achieved 3 million 959 thousand users unique generating 9.3 million visits ”, he commented.

He added that, when reviewing the figures from March to October, the toughest months of the pandemic, the number of users in search of housing to live or invest in them grew 38 percent, with greater interest in buying houses, instead of departments. In this period, the total number of new users of the platform amounted to 22.5 million.

« There is a revaluation of the space, rather than looking for an apartment, they are looking for a house: 47 percent say I am looking for a house, ideally to have a garden, more square meters, a balcony or a terrace, » he added.

Sergio Rojas, Country Manager of La Haus México, mentioned that in addition to the revaluation of properties now as work, school and rest spaces, the market gained momentum with the financing of institutions such as Infonavit, Fovissste and banks to continue buying properties .

“At La Haus we are making over 200 transactions per month (in Mexico and Colombia), of these, about 40 percent have been digital. Right now the buyers are generation X and millennials, 45 percent are buyers between 25 and 35 years old on their first investment, « he said.

He highlighted that of the total average transactions in which they participate, at least 85 percent were new housing investments with a value of 2.5 to 3 million pesos, with a tendency to be smaller and more flexible to adapt to new uses, including tourism such as those of Airbnb.

« There are those who have already made sections in new developments on the Reforma corridor, thinking about apartments that will be delivered in the next two or three years, to rent and have the tourist rental boom, » added Rojas.

Despite the interest in purchasing a home, Javier Romero, CEO of Hausy, acknowledged that this year the number of clients who searched for a home was 5,000 people, while in 2019 it was more than 7,000.

He commented that more than half of those interested in getting their new home, interrupt their operation because they cannot afford it or end up undecided when carrying out the process.

He added that, as a result of COVID, at least 69 percent of properties acquired were for resale.

A study by the travel platform Airbnb highlighted that even remote work and the home office could move the rental market more, since at least 83 percent of its users surveyed would be in favor of moving or relocating due to a more flexible work scheme in the wake of the pandemic.

“One in five respondents has temporarily or permanently relocated their living situation during the pandemic. If schools continue to operate with distance classes, it is very likely that 60 percent of parents will consider working remotely, ”he noted.

Eusebio Gómez, Director of Strategy at Homie, explained that the rental market, at least in the large cities of the country such as CDMX “has begun to return to normality” where they have had operations ranging from 200 monthly rents and 600 listed properties .

He added that in the pandemic, Homie’s digital business allowed them to go through the crisis with good numbers, while in total only 1 percent of the rental contracts had to be renegotiated.

“Our rents have more or less returned to normal, lasting approximately 21 days to rent the properties. Prices keep coming back. There was a realignment of the demand for rental housing ”, he commented.

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