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Indian millennials, born between the early 1980s and mid-1990s, are investing in real estate due to economic changes, lifestyle desires, and favorable policies.
Another emerging factor, which has brought the preference for home-buying, is intergenerational financial support.
Changing economic situations, lifestyle desires, favourable government policies coupled with investment consciousness have positioned Indian millennials as the new entrants in the real estate investment landscape. Since India boost world’s largest millennial population (440 million), this demographic is quickly making its presence felt in the country’s real estate market. Before turning to real estate, millennials, also known as Generation Y, born between the early 1980s and the mid-1990s, primarily channelled their income into fixed deposits, recurring deposits, starting entrepreneurial journeys, cryptocurrencies, stocks and equity markets. However, the Covid-19 pandemic was the major setback. The financial losses, high failure rates, negative real returns and burnouts from volatile investment options and entrepreneurial ventures led the millennials to explore new areas of investment.
A Strategic Shift Towards Real Estate
This is when the shift to real estate happened and this is driven by the desire of having asset creation, other income opportunities, long-term stability and lifestyle upgrade (owning instead of renting. This is largely because millennials are now reaching an age where they are starting to think about their long-term investment objectives. Besides this, it is also fuelled by the bloom in real estate market in India. The market is expected to reach INR 65,000 crores by 2040, as against INR 12,000 crores in 2019. By 2030, the market is likely to reach a market size of USD 1 trillion from an estimated USD 200 billion in 2021, contributing 13% to the country’s GDP by 2025. Other sub-sectors like retail, hospitality, and commercial real estate are expanding rapidly to provide necessary infrastructure to the needs of the growing country.
Family Wealth and Financial Leverage
Another emerging factor, which has brought the preference for home-buying, is intergenerational financial support. While traditional mortgages remain dominant, a significant portion of Gen Y buyers are tapping into their family wealth to fund their purchases. In high-demand urban markets like Mumbai, Bengaluru and Delhi-NCR, this financial edge allows younger buyers to compete more effectively, often advancing affordability barriers that would otherwise delay entry. Taking a note of this, developers and lenders are now offering customised payment plans, co-borrowing models, and digital-first buying journeys designed with this young demographic in mind.
Financially secured, digitally empowered
As compared to their previous and upcoming generations, millennials are most financially secured ones. Their better education opportunities have made them secured lucrative jobs with dominant positions, which have helped them to lay a strong financial foundation. Moreover, many millennials have started out their family life late, which provided them more disposable income to invest in. They are preferring to invest in under-construction homes so that they can customise it according to their needs. Unlike the earlier generations who relied on brokers or site visits, GenY are using digital platform for research as it provides access to user reviews, ratings and discussions with verified ownership, legal clearances, RERA compliance and detailed documentation.
Way Forward
With conducive factors propelling the growth of millennials investing in real estate, the trend is going to stay for a longer period. Millennials are reaping all the benefits of the rising accessibility to invest in real estate. Therefore, the future looks all promising for them. This generation will also set the stage for Gen Zs to have similar aspiration of property ownership. From generating passive income streams, developing long-term wealth and investing in appreciable assets, millennials are on the right track to powerful groups of investors today. If you’re a millennial looking to get your feet wet in investing, now might be the right time; with education and resources at your disposal, there’s no limit to what they might do next!
It is authored by Aayush Puri, Head of ANAROCK Channel Partners and ANACITY
The views expressed in this article are those of the author and do not represent the stand of this publication.
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