Millennials are transforming the Indian Real Estate Market
Millennials are typically categorized as those born in the years between the 1980s to mid-to-late 1990s. This 25–40 age bracket group did not typically give priority to buying homes as they preferred the flexibility of not owning Real Estate and reluctance of spending or unavailability of the large upfront money. Millennials also tend-to-be community bound, which is among the reasons for the large boom in co-working spaces and co-living options. In terms of investment, the Tech-savvy millennial generation was also more inclined to invest in the equity market due to the availability of digital platforms and the easy process of investment.
However, Covid-19 has significantly impacted the millennial generation, especially during the lockdown. Imagine being stuck at a place far away from home and not being able to reconnect with your family. Imagine not having sufficient money to pay your rent due to a job or salary cut. Imagine trying to relocate amidst the raging pandemic. These were the situations faced by many millennials. Covid-19 has flipped the investment pattern of the millennial generation who have understood the importance of owning a home. In a recent survey conducted by Anarock Property Consultants, 55% of the voters favoring Real Estate are aged between 25–35 years as opposed to only 42% in the previous year. The same survey indicated that 57% of respondents now favor Real Estate over the stock market, gold, and fixed deposits. There is a large influx of millennials driving investment opportunities of owning their dream homes as they are not viewing it as a financial investment but also an emotional investment.
Key reasons why millennials are investing in Real Estate post-Covid-19:
Work from home & E-Learning phenomena: Millennials have realized the need and emotional appeal of owning a house on which you can’t put a price tag. As the millennial generation typically preferred flexibility, rentals and co-living spaces do not offer the required safety, space, and independence as owning a home.
Passive income: Rental income is one of a kind. Buying a property and renting it out will yield a high return on investment over time. This is something millennials have typically not explored but important for millennials to realize that generating passive income is one of the most critical steps in Wealth generation.
Reduced home loan interest rates: Firstly, the early 30s to late 20s have fewer obligations in finances. And it is easier to get a home loan with a longer repayment tenure period and lower EMI rates. The eligibility has increased for millennials as home loans are now at an all-time low with Covid-19.
Millennials who are typically more environmentally conscious are redefining the housing market and the way houses are built to look. Millennials prefer to reside within the city limits where they are close to amenities and transportation. This will now be the opportunity for millennials to view these homes as investment opportunities since homes within city limits may not be affordable for everyone without an external source of funding from banks or friends and family.