A Generation Ahead: The Rise of Gen Z in the Luxury Real Estate Market

Key Takeaways 

• Gen Z consumers are tracking ahead of previous generations in luxury goods purchases and homeownership.  

• Gen Z luxury homebuyers are prioritizing eco-friendly living, high-tech home features and homes that require little to no maintenance.  

• Wealthy Gen Z homebuyers will satisfy their wanderlust by purchasing several smaller homes in multiple locations versus a single large home.  

The rise of the Generation Z consumer, born between 1996 and 2012, has heralded a new era in many industries. They’ve popularized secondhand shopping, brought back ‘90s fashion and are responsible for the recent explosion in vinyl record sales. Now, as this influential cohort enters adulthood and begins to accumulate wealth, Gen Z, with their distinct values, lifestyle choices and technological prowess, is set to transform the luxury real estate landscape.  

Ahead of the Curve

The younger generations are key pillars of today’s luxury goods market, with Millennials and Gen Z accounting for all of this market’s growth in 2022, according to a report from consulting firm Bain & Co. Additionally, spending by Gen Z and the younger Gen Alpha, or those under 13, will make up a third of spending in the luxury goods market by 2030, demonstrating “a more precocious attitude toward luxury” among these consumers, according to the report.  

Gen Z consumers are also entering the luxury market earlier, purchasing high-end goods — everything from beauty products to designer shoes and purses — by age 15 on average, three to five years earlier than Millennials did.  

“Gen Z has incredibly particular, refined tastes,” says Aaron Kirman, owner and CEO of Beverly Hills-based AKG Christie’s International Real Estate and one of the top luxury real estate brokers in the country. “They’ve been exposed at a young age to the worlds of fashion and art, with social media being a driving force in all of this.” 

They are also tracking ahead of other generations for homeownership. 

“We are working with Gen Z now. There is no age or boundary in luxury real estate anymore,” says Kirman. “The way that people make millions has changed, and social media and technology have opened up a whole new world of wealth that we’re seeing in Los Angeles.” 

Several luxury markets in Europe are also beginning to see interest from Gen Z buyers, partially driven by favorable work visa programs and the well-documented Gen Z desire for remote work. Italy is one of these destinations, according to Alexander Benedetti, CEO of Benedetti Real Service, a Christie’s International Real Estate affiliate in Northern Italy, and Danilo Romolini, sales manager for Romolini Immobiliare Christie’s International Real Estate in Tuscany and a member of Gen Z himself.  

“A discernible trend among our Gen Z clientele, predominantly comprised of HENRYs - High Earners, Not Rich Yet – and a substantial cohort of young entrepreneurs, is the intention of acquisition of secondary homes within our market,” says Benedetti. “And a noteworthy characteristic of this is often their status as ‘digital nomads.’” 

“American Gen Z luxury buyers view Italy as an excellent location to work remotely. They enjoy Italian culture and cuisine and the relaxed lifestyle,” says Romolini.  

Revolutionizing Luxury Real Estate

Despite being so new to the world of luxury real estate, Gen Z is already making its impact on market trends, according to several Christie’s International Real Estate affiliates. One of the most notable ways is through their desire for sustainable living.  

Gen Z is worried about climate change, with 76% of Gen Zers citing it as one of their biggest concerns, according to Pew Research study results published in the Economist.  

A study by Tata Consultancy Services found that 84% of Gen Z consumers will spend more on sustainably produced and ethically sourced products – and this principle extends to housing. Gen Z buyers are drawn to homes that offer sustainable features, and many are willing to pay up for properties that are built with environmentally friendly materials or built to minimize their carbon footprint.

“The desire to be environmentally conscious extends beyond the dwelling structure to eco-friendly landscaping, preservation of natural habitats, and initiatives promoting biodiversity. These preferences underscore a comprehensive commitment to ecological responsibility within the luxury real estate market among this demographic,” says Anastasia Menardi Demai, a broker at Benedetti Real Service.

In Dubai, another market drawing interest from Gen Z, the desire for sustainable living is demonstrated through requests for environmentally friendly technologies such as water filtration systems and solar power, according to Jackie Johns, owner of Christie’s International Real Estate Dubai. “We expect Gen Z to play an increasingly significant role in the growing push for sustainability in Dubai real estate,” Johns says. 

And the desire for high-tech homes isn’t limited to sustainability. “Gen Z buyers prefer a slew of high-tech features ranging from remote lighting to voice control mechanisms, showing an unmatched desire for personalization and convenience,” adds Johns.  

Another trend being driven by Gen Z is a desire for more compact and efficient spaces. While older generations prefer grand, sprawling homes, Gen Z is drawn to homes that are smaller and easier to maintain, according to Edgardo DeFortuna, CEO of Fortune Christie’s International Real Estate in Miami. This is partially attributable to Gen Z’s more nomadic lifestyle, which requires maintenance-free homes, along with the fact that many young people are delaying getting married and having children. 

According to Kirman, Gen Z’s wanderlust is also leading young, affluent buyers to purchase several smaller homes instead of one large one. “Instead of buying one $15 million home, they’ll buy three $5 million homes in different locations,” says Kirman.  

As the first generation to grow up with social media, Gen Z is also driving a revolution in real estate marketing and communications, with social media becoming a tool in the decision-making process for many younger buyers and sellers. Agents and brokerages are relying on platforms like TikTok and Instagram to market listings and connect with potential clients, and some agents have amassed huge followings, becoming influencers themselves. 

“We have invested in increasing and enhancing our social media content – a major source of real estate interaction with Gen Z. This ranges from innovative property tours on Instagram to relevant market insights on YouTube,” says Johns. “Additionally, given Gen Z’s penchant for tech-driven environments, we regularly include high-tech features, like 360-degree virtual reality tours, in our offices, experience centers and new-development launches.” 

For more trends and insights, read the 2024 Global Luxury Real Estate Forecast here.