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16 March, 2020
Globally, the millennial segment is playing a key role in driving demand in housing markets & is emerging as a dynamic propellant in Real Estate growth. In countries such as the US, this portion of the demographic accounts for nearly 36% of the sales while in China the numbers are even higher with around 70% of the homeowners being millennials.
In tandem with the global trend, millennial homebuyers are emerging as a pivotal force in driving demand for housing in India across the spectrum. Their transformation into a key determinant of property market demand can be attributed to a myriad of factors such as growth in disposable income, a shift in preferences, increasing propensity to safeguard against possible future risk, growth in home finance & much more.
Another fact that has contributed to the rise of millennial homebuyers as primary buyers is the evolution of the property transaction space from an analogue to a digital format. The launch of online property search & listing portals, apps, display ads, virtual walkthroughs has been a major advantage as it has made the entire the process of searching for suitable properties & securing financing a more streamlined process.
In a bid to analyze the property consumption trends, we conducted a survey of 1200 middle-income millennials below the age of 35 with an annual income of over 7 lakhs per annum. Our findings indicated that 75% of buyers in this segment were considering purchasing a home in the next three years which goes on to emphasize the strong influence of the young buyers on driving demand across real estate markets.
In terms of ticket sizes that are attracting the majority of the interest, there is a marked preference for affordable housing which is providing a huge boost to projects within this category. Millennial homebuyers were found to pivot towards homes in the price bracket of 40-80 lacs followed closely by the under 40 lacs. This also highlights that budget-friendly options is a compelling factor for younger homebuyers who are more inclined towards safeguarding against risk in the future that are generally associated with high-end homes.
Amid a plethora of media platforms that offer millennials swing to for information on properties, 58% of millennial buyers have stated that online portals are the primary go-to resource when it comes to gathering insights on homes that meet their requirements. The benefits of accessing all the information in a single place & the ease of doing comparative analyses tend to be the major motivating factor behind property portals emerging as a popular choice.
Our analysis on the preferred methods of home financing indicated that the majority of the millennial homebuyers favour home loans to purchase property. Interestingly, 35% shared that they would seek assistance from their parents.
Collectively, millennials as a consumer class represent a total spending capacity of around USD 3.6 trillion growing fourfold in a decade’s time. Alongside other industries such as retail, automobiles, & consumer appliances etc., the millennials are going to play a crucial role in driving demand for Real Estate in India.
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