How motivated are millennials towards buying real estate in India
January 9th, 2018
When it comes to owning a home, millennials are geared up and see real estate as a sound and serious investment opportunity
Millennials have, without doubt, been playing a key role across many industry sectors as an important customer and decision making segment. This demographic has perhaps been the most influential of all across industries over the last few years. Statistics-wise, the millennials make up a sizeable portion of the Indian population. Interestingly, they have a more serious outlook towards life and lifestyles and yes, they do have the power to invest. Sooner or later this demographic is poised to have a greater influence on the real estate sector in India.
A survey by CBRE (real estate and investment firm) says that 82% of Indian millennials stay with their parents and more than 23% of these are likely to move out of their family homes within the next two to five years. What’s even more interesting is that 65% of the millennials aspire to buy a property in the future. These stats point out to an encouraging fact – that the millennials are serious about their future and consider owning a home as an important investment.
By 2020, 65% of our population will be under the age of 35, it is critical that we gain insights into the behaviour of this population class. The results are not only insightful, but also contrary to the general perception around millennials.
For instance, 82% of the millennials stay with their parents, saving for the future is among their top priorities and a large majority look at real estate as a sound investment opportunity
– Anushman Magazine, Chairman, India & South East Asia, CBRE
Far from the usual impression, the millennials have picked up on a mature thought process and on leading a healthy lifestyle. They have had the opportunity to learn things quicker than their previous generation and are showing signs of a pragmatic approach to life. The millennials want to save on earnings, lessen spends on frills and fancies and more importantly for the real estate sectors – feel the pride in owning a home and also see it as an investment opportunity.
Factors are driving the millennial outlook on real estate
Conservative and Serious: The millennials are known to splurge and their approach towards life has been less on the serious side and more on the fun side. But this is changing; the past economic slowdowns, loss of jobs and certain uncertainties have helped the millennials return to a more conservative behaviour and approach towards life in general.
Investment Oriented: The demographic is more internet savvy and thereby more knowledgeable than its previous generations. It tends to do a lot of research and spends money wisely with an investment-oriented approach. In fact as per the CBRE report, for 35% of the Indian millennials, investment is the key driver to buy a property. This is actually good news for developers looking to focus on the millennial segment.
Community Matters: Contrary to popular opinion, millennials do value family and traditions and they have much inclination towards community living. Stressful work scenarios and time-constrained lifestyles have made the demographic realise the importance of viewing and regarding a well-knit community based life as more valuable. In fact, millennials view places of work and living as venues for social interaction and bonding.
Stability Requirements: The millennials have realised the importance of having a stable and well-settled life. In India, owning a home is a major part of stability in life and the millennials are very focused on achieving stability through owning a home.
Financial and Emotional security: Owning a home is a sign of financial and emotional security for most millennials. They are beginning to view purchase of a home as a means to provide some level of financial and emotional security to their families. Millennials have quickly realised that an owned home sets them free being dependent on landlords for housing requirements. They also realise that owned homes help save on amounts spent on rentals which in turn can be used to pay EMIs on a purchased home.
The millennials are quite motivated towards buying property in India and as we speak, they are planning to pool up enough money to own a home. Developers will do well to understand this demographic and customise home offerings as per need and cash in on this demographic’s need to make sound and opportune investments.
Another important thing developers need to be aware of is the fact that millennials are knowledge seekers, they do exhaustive research to choose the best possible housing option available. They look into the pricing aspect but will also focus on the design, construction, location of home and since they also treat home as an investment vehicle, they definitely will look for long-term gains on the purchase of a home.