Millennials reshaping Indian housing
It’s very clear that their generation has a very different take when it comes to home ownership.
By now, it has become quite clear that as a generation, millennials have a very different take on homeownership than their parents and grandparents did. How do millennials view home purchase differently in general, and in India in particular?
In the first place, this is a generation of people who were hands-on with technology from childhood onwards. 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.
This dynamic generation has been defined in many different ways, but we generally consider people who were born between 1980 and 2000 as millennials.
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 at home. Either way, 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.
There can obviously be no cookie-cutter approach to studying the preferences of an entire generation. 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. For instance, different attitudes towards renting or buying homes in different parts of the United States and Europe are readily apparent.
In Asia, the variations are even more distinct, primarily because employability and prosperity levels tend to vary vastly in most cities.
To say that Indian millennials prefer to rent homes would be a senseless generalisation. 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 sway.
Therefore, an Indian millennial often opts for homeownership where his or her global counterparts may happily live their entire lives in rental homes. In India, no single factor conveys a feeling of security and social integration quite as much as a self-owned home does. Buying a home may or may not make the same kind of investment sense as stock market speculation. However, an Indian millennial is very apt to consider owning a home as a 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 consists of transient workforces which depend solely on rental accommodation.
Developers have had no option but read the writing on the wall and fall in line with the more exacting requirements of Indian millennials. Builders who have stubbornly held on to their ‘traditional’ success formulae tend to find themselves with few takers. 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, brochures and radio jingles. The millennial factor has induced a major revolution in the Indian residential real estate space — and it will only keep changing.