In Indonesia, the dream of owning a home is becoming more challenging, especially for Gen Z and Millennials.
With rising property costs, shifting lifestyles, and financial priorities, many young Indonesians are finding it difficult to invest in real estate. However, our latest insights reveal that despite these challenges, many still hold aspirations of purchasing a home in the future.
Housing Challenges for Gen Z and Millennials
According to our recent study in November 2024, Gen Z and Millennials in Indonesia face significant obstacles in their path to homeownership. Economic factors, such as rising property prices and limited financial resources, make buying a house a daunting task.
Despite these challenges, our research shows that these generations are in fact optimistic and determined.
Our survey found out that:
- 60% of Gen Z and 45% of Millennials have a plan to purchase a house.
- 34% of Millennials and 49% of Gen Z prefer to rent and live in an apartment, flat, or dormitory rather than buy a property.
- 34% of Gen Z and 49% of Millennials are already homeowners, showing that despite obstacles, many young people have found ways to achieve their goal.
Why Gen Z and Millennials Prefer Renting
The choice to rent instead of buy is influenced by various practical reasons. Here are the top reasons why young Indonesians prefer renting:
- Mobility and Flexibility: 39% of respondents find it easier to move from one place to another due to lifestyle or career changes.
- Proximity to Key Locations: 13% prefer renting properties that are strategically located near schools, offices, or urban centers.
- Cost Comparison: 9% believe that the total cost of renting is more affordable than taking on a house ownership credit.
- Housing Availability: Another 9% report difficulty in finding their dream home in desirable areas.
- Comfort with Rental Living: 9% of respondents feel accustomed to the convenience of rental living in apartments or dorms.
- Other Factors: 22% cited various other reasons for choosing renting over buying.
Budget Preferences for Renting
When it comes to rental budgets, Gen Z and Millennials in Indonesia are relatively conservative in their spending. This survey indicates the following average monthly rental budgets among young Indonesians:
- 74% spend IDR 500,000 – IDR 1,000,000 on rent.
- 17.4% allocate IDR 1,000,000 – IDR 2,000,000.
- Only 4.3% each set aside IDR 4,000,000 – IDR 5,000,000 or more than IDR 5,000,000 for monthly rent.
The Future of Homeownership for Gen Z and Millennials
Despite the current inclination toward renting, the desire to own property is strong among Indonesian youth. Many are working toward achieving this goal, while others continue to weigh the benefits of renting, particularly in a dynamic and rapidly changing housing market.
The decision between buying and renting for Gen Z and Millennials in Indonesia is heavily influenced by financial constraints, lifestyle preferences, and career considerations. For those looking to enter the property market or continue renting, it’s clear that flexibility and affordability will remain key factors in making housing choices.
Contact us at partners@snapcart.global for more information.
