Millennials account for over a quarter of the Country’s population and emerge as a powerful stakeholder in the consumer market. This impact is more seen and felt in the post covid world. Before the pandemic, the majority of the millennial generation preferred investing in crypto assets and even the stock market due to higher yields on investment. However, in the last couple of years, the real estate sector has witnessed healthy tractions from the millennial generation. The residential segment is undergoing significant transformation and the growing inclination of millennial buyers in homeownership reflects that they are an influential segment of home buyers at present.
Mr. S K Narvar, Group Chairman, Trident Realty – “The real estate sector is undergoing a metamorphosis, with millennials taking the lead in driving this transformation. The desire for luxurious living, work-life balance, well-being, and future stability has prompted a significant portion of the millennial workforce to invest in real estate across metros and tier 2 & 3 towns. Moreover, the yearning to stay close to family, coupled with improved connectivity and robust social infrastructure, has made non-metro cities an attractive investment destination for this generation. Interestingly, millennial homebuyers are looking beyond the metropolis and focusing on emerging locations in Tier 2 & 3 cities.”
He further added, “Recent surveys revealed that 61% of millennial property buyers in emerging cities are end-users, seeking spacious living environments and enhanced work arrangements. The remaining 39% are astute investors, looking to capitalise on the growing realty market in Tier 2 & 3 markets.”
As India’s largest and most significant demographic, it comprises a staggering 440 million individuals, or 34% of the population. Now the question is whether they will continue to view homeownership as a solid investment. The increasing number of millennial homebuyers demonstrates that the trend is here to stay.
Pradeep Aggarwal, Founder, and Chairman, Signature Global (India) Ltd said “With a rising disposable income, changing lifestyles, and a shift towards a hybrid work model, Millennials are reshaping the way we look at home buying. Millennials nowadays have access to better job opportunities, resulting in higher earnings. Moreover, with a growing number of dual-income households, the affordability of homes has increased, giving millennials a sense of financial stability and the ability to invest in their dream homes. The housing sector can expect to see a continued rise in demand for quality homes that cater to the needs of this influential demographic. Thus, in the coming years, the Indian housing sector will undergo a paradigm shift and become fully aligned with the needs and desires of millennials.”
With companies increasingly adopting flexible work arrangements, the need for spacious, comfortable homes located in lush green areas with better living standards, such as parks, entertainment centers, and other social amenities has become a top priority for millennials. The Anarock survey also discloses that in a major trend reversal in the city’s housing market for the first time, homebuyer demand for 3-BHKs outstripped that of 2-BHKs.
Pankaj Bansal of M3M India says, “The aspirational middle-class millennials and Gen-Z are emerging as one of the key drivers of the realty economy, which is now expected to grow by 12-15% CAGR in the next five years. There is also a paradigm shift to 3 BHK from earlier 2 BHK. This shift is being seen in the majority of the cities including NCR. There will also be a significant shift by the middle class from mid-segment homes in 2023, ranging from Rs. 40-80 Lakhs to high-end luxury residential units, priced between Rs.80 lakhs to 1.50 crore – which is attributing jointly to about 62% of demand. This might be the reason that more real-estate developers are also keeping their focus on growing segments. Though, it is also true that the luxury and ultra-luxury segments too comprised a steadily rising share of new launches at 12% and 6%, respectively.”
The consumer sentiment survey done by Anarock last year highlighted that the millennial generation prefers buying a home over renting. These new-age modern homebuyers seek comfort and luxury living besides safety and security in a home.
Mr. Siddharth Katyal, Group Director, and Business Strategist, Omaxe Ltd. said “The pandemic infused a sense of home ownership amongst the millennial generation which led to them buying and investing in homes. The flexibility of working from home and hybrid models further accentuated the demand for owning a home. According to a report by Anarock, in 2020 millennials accounted for about 42% of all homebuyers which is a huge share. The demand is more seen in tier 2 cities since the transforming lifestyle, evolving preferences, hybrid work model, and big and spacious homes along with modern amenities attract millennial homebuyers to such cities.”
According to data, real estate remained the preferred asset class for investment for over 57% of respondents in the Anarock survey and 48% of these respondents were in the age bracket of 25–35 years. Previously, in the 2019 poll, this number was 20%. The significant hike shows that millennials are now the new age of homeowners, and the trend is likely to continue in the future.
The survey also reveals that the majority of these new-age homebuyers favor mid and premium-segment homes priced between 240 lakhs to 15 crores. Luxury homes costing between 21.5 and 225 crores are also in greater demand.
