Demand for buying homes among Indian millennials has increased compared with pre-pandemic levels, as mortgage rates hit a multi-decade low, and more of them expect to work-from-home regularly or permanently in the future, according to executives from leading real estate companies.
This demand is in part being driven by millennials expecting lesser mobility in the future as work-from-home culture takes hold, along with a growing sentiment shift towards savings and asset creation post-pandemic, they said.
“The 25-40 age bracket who until now did not give much priority to buying a home as it gave them the flexibility to switch jobs and hop cities, is now more than ever serious about owning a physical asset. The pandemic has brought everyone closer to realising the importance of having a home,” said Saurabh Garg, a cofounder of real estate platform NoBroker.com.
A spate of reforms had made the real estate sector unviable for investment for many, and renting made more sense in the last few years, Motilal Oswal Real Estate chief executive Sharad Mittal said. This is now seeing a reversal — with mortgage rates being at a multi-decadal low of sub-7% and demand being more widespread, owning a home has become more attractive for millennials, he added.
“The pandemic has created a higher need for stability and security that comes from staying in an owned home vs a rented one,” Mittal said.
Additionally, millennials have breached the 1 lakh per month salary mark that has spurred the demand, Azlo Realty CEO Krish Raveshia said.
“Partly driven by lifestyle aspirations as well as affordability, millennials are likely to take up investments in the range of Rs 30 lakh to Rs 70 lakh. Some more successful millennials may even look at pre-leased assets or under-construction properties available on offer with financing schemes,” Raveshia said.
Pre-Covid, the millennial generation constituted about 49% of the buyers on NoBroker. The number has now jumped to 63%. Millennials in Mumbai and Hyderabad lead the pack with overall demand growth of 74% and 72%, respectively, compared to less than 50% increase in demand from other segments.
Millennials are looking to move into suburban areas where things are more affordable and spacious, as the need for having a separate workspace mount in a work from home economy. They are showing interest to buy a 3BHK unit, the cost of which is comparable to 1 or 2 BHK in neighbourhoods surrounding IT hubs, according to data provided by NoBroker.com.
“The projects towards these localities are more affordable and more spacious. They also offer a better quality of life as they are not very crowded, and surroundings are peaceful,” Garg said.