How Mil­len­ni­als re­de­fined In­dian res­i­den­tial real es­tate mar­ket

NEW WIN­DOW Co­working spa­ces, rent­ing homes.... how Nex­tGen is view­ing the re­alty land­scape in In­dia

Hindustan Times (Chandigarh) - Estates - - HT ESTATE - Anuj Puri feedback@livemint.com Anuj Puri is chair­man, ANA ROCK Prop­erty Con­sul­tants

NEWDELHI: It is quite clear that as a gen­er­a­tion, mil­len­ni­als (those who are born be­tween 1980 and 2000) have a very dif­fer­ent take on home own­er­ship than their par­ents and grand­par­ents did. This trend has been stud­ied ex­ten­sively in the West, but it has made it­self quite ob­vi­ous in In­dia too. So how do mil­len­ni­als view home pur­chase dif­fer­ently in gen­eral, and in In­dia in par­tic­u­lar?

DIF­FER­ENT STROKES

In the first place, this is a gen­er­a­tion of peo­ple who were hands-on with tech­nol­ogy from child­hood on­wards. So­cial me­dia, Google and the blog uni­verse have been part of their life from the word ‘go’.

Mil­len­ni­als also dis­play a much higher abil­ity to adapt and ac­com­mo­date than the pre­vi­ous gen­er­a­tions, which is why co-working has be­come such a rel­e­vant con­cept in In­dia to­day. Mil­len­ni­als who have fin­ished col­lege and are pro­fes­sion­ally ac­tive tend to have quite a bit of the ‘dig­i­tal no­mad’ in them.

RENT­ING GEN­ER­A­TION?

The hith­erto un­prece­dented abil­ity and will­ing­ness of mil­len­ni­als to adapt is one of the chief rea­sons why the mar­ket for the rental homes in In­dia is stronger to­day than ever be­fore.

Mil­len­ni­als are not as par­tic­u­lar about the status value of their ad­dress as they are about the con­nec­tiv­ity, con­ve­niences and se­cu­rity of a neigh­bour­hood. They want to be able to get to work and back home quickly and en­joy a de­cent level of so­cial ameni­ties in the area they live in.

For many of them, buy­ing a home in such an area may be be­yond their fi­nan­cial ca­pa­bil­ity, so rent­ing makes com­plete sense to them. How­ever, even if it is af­ford­able, mil­len­ni­als as a global breed do not nec­es­sar­ily view buy­ing a home as the best of in­vest­ment choices and may choose to put their sur­plus cash into stocks in­stead.

Apart from the fact that many of them move around quite a lot, an in­creas­ing num­ber of mil­len­ni­als also have the op­tion to work from home. Stay­ing flex­i­ble with lo­ca­tion can be an im­por­tant con­sid­er­a­tion for many mil­len­ni­als dur­ing their ac­tive ca­reer life.

Glob­ally, es­pe­cially in the highly de­vel­oped coun­tries, the mil­len­nial mind­set as a fac­tor in­flu­enc­ing res­i­den­tial mar­ket trends high­lights a def­i­nite predilec­tion for rent­ing as op­posed to buy­ing homes. We are also see­ing this trend in In­dia, but it is far less dis­tinct.

IN­DIAN MIL­LEN­NIAL

The near im­pos­si­bil­ity of try­ing to slot this gen­er­a­tion in a neatly-la­belled cat­e­gory be­comes even more ev­i­dent when we con­sider how mil­len­ni­als ac­tu­ally dif­fer quite a lot from coun­try to coun­try.

In Asia, the vari­a­tions are even more dis­tinct and in In­dia, where the gulf be­tween the earn­ing power and there­fore in­vest­ment ap­petite of dif­fer­ent parts of the pop­u­la­tion even within the same gen­er­a­tion can be vast, is a prime ex­am­ple.

To say that In­dian mil­len­ni­als pre­fer to rent homes would be a sense­less gen­er­al­iza­tion. In this mas­sive sub-con­ti­nent, peo­ple come from dif­fer­ent eco­nomic and so­cial back­grounds.

We do see many com­mon traits of the mil­len­nial gen­er­a­tion among Indians who have had the good for­tune of a good ed­u­ca­tion -- for in­stance, dig­i­tal savvi­ness, a will­ing­ness to blend their pro­fes­sional and per­sonal lives, and the ten­dency to travel a lot. How­ever, we also see that parental and so­ci­etal in­flu­ences can still hold con­sid­er­able sway.

There­fore, an In­dian mil­len­nial of­ten opts for home­own­er­ship where his or her global coun­ter­parts may hap­pily live their en­tire lives in rental homes. An In­dian mil­len­nial is very apt to con­sider own­ing a home as an es­sen­tial and fun­da­men­tal ba­sis from which to launch the rest of his or her other life plans.

Also, the reg­u­lar in­come of a rented-out sec­ond home con­veys a much stronger sense of fi­nan­cial sta­bil­ity in In­dia than in­vest­ments in the stock mar­ket. While it is true that like the stock mar­ket, the real es­tate mar­ket is also driven largely by sen­ti­ment, it is equally true that the real es­tate mar­ket is not nearly as fickle. Fur­ther­more, there is al­most never a dearth of de­mand for rental homes in a coun­try where the largest part of the pop­u­la­tion can still not af­ford to buy homes and in­deed con­sists of tran­sient work­forces which de­pend solely on rental ac­com­mo­da­tion.

OTHER VARI­ABLES

Own­ing prop­erty tends to make a lot more sense to an In­dian mil­len­nial.

Again, this trend can vary pretty sig­nif­i­cantly from state to state and even city to city, de­pend­ing on sev­eral fac­tors in­clud­ing: The af­ford­abil­ity of real es­tate, The av­er­age level of ed­u­ca­tion among the lo­cal pop­u­la­tion, which in­flu­ences pur­chas­ing power, The kind of em­ploy­ment op­por­tu­ni­ties be­ing gen­er­ated lo­cally, and the so­cial in­flu­ences at play .

An area where we have seen con­sid­er­able change is the kind of homes that mil­len­ni­als pre­fer over their fore­bears: Su­per-sized lux­ury homes are gen­er­ally out, com­pact homes with good po­ten­tial re­sale value are in, snob-value ad­dresses are out, lo­cal con­ve­niences and con­nec­tiv­ity are in, pro­jects by un­known de­vel­op­ers are out, pro­jects by well-known de­vel­op­ers are in, Poorly-de­vel­oped and there­fore in­se­cure lo­ca­tions are out, lo­cal and in-pro­ject se­cu­rity is in, Fo­cus on the low­est ticket size is out, fo­cus on value for money is in and fi­nally, non-avail­abil­ity of park­ing spa­ces is a com­plete deal-breaker.

Some of these re­quire­ments may seem nat­u­ral and log­i­cal when one con­sid­ers them to­day, but they are ac­tu­ally the re­sult of a gen­er­a­tion which lives, works and thinks very dif­fer­ently than the pre­vi­ous ones. While In­dian mil­len­ni­als do con­tinue to tra­di­tional in­flu­ences, they are equally wired into the re­al­i­ties of mod­ern-day In­dia where pos­i­tives such as tech­nol­ogy evo­lu­tion, vastly im­proved in­fra­struc­ture and a sig­nif­i­cantly re­vamped job mar­ket, as well as neg­a­tives like pro­lif­er­at­ing crime, ur­ban de­cay and traf­fic chaos play a role in the where, when and how of home buy.

De­vel­op­ers have had no op­tion but to fall in line with the more ex­act­ing re­quire­ments of In­dian mil­len­ni­als.

The sea-change the mar­ket has un­der­gone and the new in­flu­ences that drive it are very ev­i­dent from the kind of fea­tures that builders now high­light in their hoard­ings, prod­uct brochures and ra­dio jin­gles.

In­deed, the Mil­len­nial Fac­tor has in­duced a ma­jor rev­o­lu­tion in the In­dian res­i­den­tial real es­tate space - and it will only keep chang­ing from here on.

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