According to a report by Investment banker Morgan Stanley, millennials are a key force that can drive the financial success and economic growth of India. People in this age group make up almost half of India’s workforce and provide 70 percent of national household income with a consolidated spending capacity of $3.6 billion.
The category comprises educated and successful young professionals having a higher disposable income, and hence present-day millennials have evolved to being financially independent and responsible in all aspects.
With the unprecedented times, millennials have become more cautious about their investment strategies and looking at diversifying their portfolio for security and wealth generation. A group of informed audience, today’s millennials understand the nitty-gritty of each asset class and analyze the current market scenario, thus, opting for conventional investment options that give quick returns.
Millennials have certainly shown a significant shift from being asset-light to leaping into the world of investing, and the 426 million-strong young India are now sincerely planning for their financial futures.
Covid-19 has undeniably altered the way we exist, think, work, or even socialize with people around us. With a paradigm shift in our work culture and after being locked indoors for a long time, there is a surging need for owning a home amongst millennials. Besides, the differential behavior towards renters and owners in various housing societies during the pandemic further influenced their decisions for owning a home instead of renting.
With business uncertainties resulting in stock market crashing and modern investment instruments like mutual funds witnessing severe volatility, real estate emerged as the safest means of asset creation.
Additionally, affordability has enhanced with the lowest-ever interest rates, various government initiatives, lucrative offers by developers, and thus millennials are considering real estate as the investment asset one should go for. With the significance of a safe haven developing stronger, millennials are viewing real estate as the best bet both from an emotional perspective and a financial standpoint.
This is further validated by the insights of a recent survey by ANAROCK that indicates homeownership has become a new priority for millennials. Out of all survey participants that voted for real estate as the best asset class for investment, at least 55 percent were in the age bracket of 25-35 years. Interestingly, 68 percent of all these millennials are end-users.
The survey further highlights that this increasing demand for housing amongst the new-age homebuyers is preferably due to physical assets rendering the highest sense of security, especially during exigencies such as Covid-19 or when stock markets plummet to new lows and financial markets witness turmoil.
Data by Nobroker.com also suggests that there is a jump of as many as 66 percent of homebuyers in the millennial segment compared to pre-pandemic times. This substantial surge in the number of young people looking to buy a property for end-use during the pandemic is mainly because of the low mortgage rates and the new work-from-home reality.
With these new realities, the pandemic has entirely remodelled consumers' lifestyles and priorities. The work-from-home scenario has accentuated the demand for larger homes, and there is an increasing need for open spaces, like decks or balconies, wherein consumers are willing to spend on that extra room to ensure the much-needed breathable space for everyone in the family.
Health & wellness factors have also become an important aspect, and hence, buyers prefer well-managed developments with greener surroundings, gyms, yoga rooms, running/cycling tracks, hospitality services, and recreational areas like clubhouses and home theatres.
With millennials seeking property for end-use and immediate occupancy, ready homes are a priority in their checklist. Moreover, they prefer to transact with reputed developers who have the aptitude to deliver good quality homes and ensure timely delivery.
As a result of shifting times, millennial homebuyers are today looking for a place that provides not just a living space but a unique living experience. Realizing the essence of living life to the fullest, millennials are viewing the home as something beyond just a place to reside in, rather than considering it as an abode to curate beautiful memories and experiences to treasure for a lifetime. This is even more, a growing reason for millennials’ preference towards Grade A developments that offer an excellent amalgamation of needs and desires and offer the finest lifestyle.
Without a doubt, the real estate industry is keenly observing millennial homebuyer’s preferences as it is going to shape the growth of the real estate market. Having said that, there is a long-term positive outlook for the real estate sector, not only nationally but globally.
Over the past few months, Indian homebuyers' confidence has reached a record high as the lowest ever interest rates push buyer traffic, and the consumer sentiments are at an all-time positive. In the coming times, the housing market will drive a crucial part of the economy amidst the Covid-19 crisis, making it the best time to take a step forward towards one’s dream home.
- By, Raunika Malhotra, President – Marketing and Corporate Communications, Lodha Group