If we look at the current trends, the basics of life – roti, kapda and makaan (Hindi for food, clothing and housing) – have become more relevant than ever, even for the younger lot who previously lived life on-the-go. The security associated with owning a physical asset during a Covid-like crisis coupled with the rising aversion to high-risk investments is giving home buying a new impetus.
What we are seeing now is that the Ola-Uber generation with millennials having ‘on-the-go’ mindset is changing rapidly in the post Covid-19 world. Millennials have emerged as the key housing demand drivers today and their preferences are now dictated by the prevailing uncertainties, stock market volatility and recent-past financial sector incidents. Many of them, who were previously averse to the idea of buying a home now prefer owning one over renting. The fact that a physical asset offers a sense of security has also motivated many to consider buying a home post Covid-19.
Add to it, amid the increasing disposable incomes, one of the safest bets for many millennials in the prevailing scenario is to invest in real estate. This was also revealed in the latest Anarock consumer sentiment survey, which saw 5,210 participants. Overall, 57 per cent of survey respondents preferred to invest into real estate in the near future while 43 per cent stated that they would invest in other asset classes like FDs, stock markets, gold etc.
Interestingly, even for these 43 per cent respondents, real estate, directly or indirectly, formed an integral part and was crucial in their future investment plans. Notably, at least 31 per cent of these (43 per cent respondents) are aiming to buy a home in the future from their current capital gains. On deep-dive of the age-bracket, it was revealed that at least 53 per cent of the millennials (aged between 26-41 yrs) would use their investment gains into buying real estate in the future.
Most importantly, today, millennials have greater access to multiple home financing options unlike before as banks and various financial institutes have also centred their focus on this age group.
Numbers say it all
To understand the new dynamics within the residential sector amid the pandemic and the changing preferences of homebuyers including millennials, the Anarock survey made further revelations. At the onset, the survey clearly indicated that real estate continued to be the best asset class for investment for over 57 per cent respondents. But if we deep-dive, it was interesting to note that a whopping 48 per cent of these respondents were in the age-bracket of 25-35 years of which >65 per cent were looking to buy a home for end-use.
Previously, in the 2019 survey, merely 20 per cent of the respondents looking to buy a home were within this age bracket. This implies that millennials are now the new-age homebuyers, and the trend is likely to continue in the future as well.
Furthermore, on analysing the age bracket of home seekers across the country, the survey revealed other interesting facts. City-wise, Hyderabad had the highest number of property seekers (55 per cent) aged within 25-35 years among all cities including metros and smaller ones, followed by 45 per cent in Pune within the same age group. Both cities have a younger population who now aspire to own a home much early in life.
Developers changing track
Given that millennials today are one of the major housing demand drivers, developers have also changed track to focus on their needs and preferences. Mostly, millennials prefer a comfortable and modern living with a host of amenities in projects including open green spaces, large clubhouse, jogging tracks, on-campus shopping and other facilities etc. They have an increased focus on health and well-being. Realising this, developers have also launched various self-sustained projects with state-of-art amenities towards the peripheries of the top cities.
Post-Covid, we saw altering consumer preferences including those of millennials wherein the city peripheries saw rising demand amid work-from-home and e-schooling realities. Additionally, here one could buy a bigger house at affordable rates.
All in all, there has been a significant change in the way real estate demand has shaped up post the pandemic. The growing urge among the millennials to own a home of their own is also fuelled by the fact that several youngsters used the pandemic to their financial advantage and cut down the cost of rent by moving in with family. Thus, home ownership has become a compelling priority for millennials in these uncertain times.
– The writer is Chairman, Anarock Group