Minimalism as a lifestyle trend, simply put is living with just your essential needs, i.e. living less. It leads to less financial responsibilities such as loans, which might turn to heavy debts, and helps you inculcate good habits such as saving and investing. In western societies, past generations of consumerism, that encouraged the acquisition of more goods and services in ever-increasing amounts, is being replaced by a new generation of buyers such as millennials that neither have the financial resources or the will to continue these past tendencies. As a result, many people are waking up to find themselves overwhelmed with the clutter of past wants, perceived needs and just stuff they purchased that have turned into unnecessary junk.
This is where Minimalism comes in
You may be tempted to think that minimalism is a recent occurrence, this couldn’t be further from the truth. Minimalistic practices have been mentioned in literature throughout history, although the term “minimalism” was not used then to describe what we know as minimalism today. As an example, historical minimalism can be found in the Japanese tradition of decluttering.
However today, minimalism is more than just decluttering, it is also a new way of viewing the value of not owning something that you can still enjoy the benefits of. Minimalism is currently a hot trending topic in the United States, even if you don’t recognize it right away. Headlines such as “millennials value happiness over stuff” and the evolution of a new “sharing economy” with the inception of Uber, Airbnb, Zipcars, etc. all point to an increased ambivalence towards consumption itself and reducing the costs associated with acquisition and ownership, focusing on experiences rather than a cornucopia of consumer goods.
So how will the rise and adoption of minimalistic lifestyles affect the property market at large?
Younger generations and the property market
First of all, trends towards minimalism for today’s younger generations, do not spell the death of the property industry as we know it. We should understand that minimalism does not mean zero spending, it simply means spending on items that are truly viewed as essential for a demographic cohort such as millennials.
Contrary to popular belief, a recent report by the National Association of Realtors found that consumers aged 36 and younger, represented 34% of all home purchases in the United States in 2017. As this younger generation of buyers form households and start families, they are increasingly turning to home ownership. In fact, millennials are now taking on more mortgages than any other generation, representing 42% of all new home loans in America according to a Realtor.com Feb 2019 survey.
A typical millennial prefers a walkable neighborhood close to work versus a McMansion in the suburbs, an Uber to a new car, cord-cutting to cable, online shopping to a trip to the mall, access to high-speed internet and mobile technology versus being off the grid. These trends all point to the overriding fact that affordability, convenience and time matter, a lot, to millennials and other younger generation cohorts.
The issue the property market will face, as minimalism becomes a generally accepted and adopted lifestyle, is that affordability, efficiency, convenience and functionality are becoming the most important home purchase values for younger generations. Style, color and size are far less important than location, value and access to technology.
As a result, many North American cities may need a radical rethink of classic single-family neighborhoods close to downtown cores, in order to transform housing options to meet the needs of a new generation of home buyers beyond city centres. The key will be to balance the needs of this revitalized urbanization with new lifestyle preferences defining liveability for younger generations.