How Increasing Demands of Millennials are Shaping Real Estate Market
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
The term “Millennials” generally refers to the generation of people born between the early 1980s and the early 2000s. They are a sociable generation and embrace technology having grown up with digital devices that bundle communication, entertainment, shopping, mapping and education all in one. From an early age, smartphone use has been the norm. One of the advantages of millennials is that they have a high ability to adapt and accommodate to situations that are constantly changing. We all are experiencing how millennials have vastly differing perceptions on home ownership as compared to the previous generations. This global trend is steadily establishing itself in the Indian residential market as well.
India will be Youngsters' Nation by 2020
By the year 2020, India is likely to be the youngest nation in the world, with an average age of 28 years. Two third of India’s population will be in the economically active age group, most of them living in urban areas. As, the economy of our country is guided by consumers, demand too changes and the real estate sector is no exception to that. The millennials or Generation Y are culturally diverse and tech savvy, they are open to new concepts and ideas even while comparing benefits of home ownership versus renting. With rising rents, millennials are on the right track and are taking the logical step of buying their own home.
Majority of Indians Live with Parents
In India, 82% of millennials live with their parents. And today, they are seeking independence from joint family systems, privacy and economic independence. To support the case further, in the Indian culture traditionally, building or buying a home brings in the feeling of settlement and a sense of security. In the light of the above scenarios, buying a home is becoming more relevant to the millennials. They conduct extensive research from primary and secondary sources on the nature of employment opportunities, location benefits and investment potential which in turn impacts purchasing power and their final decision.
Preference to Live Near Workplaces
In terms of demand from Millennials, Bangalore with its cosmopolitan culture and job outlook, is ideal to invest in a property and buy it rather than living on rent. There are several micro markets in Bangalore that are being developed with modern infrastructure and facilities. Young urban professionals usually prefer to live near their workplaces which should ideally be centrally located around shops, restaurants and entertainment promoting a “live-work-play” lifestyle.
Young Generation Ready to Invest in Homes
For a long time, cities like Bangalore were thought to be conservative when it came to spending. However, with more jobs being generated in the city, an increasing migrant population, people earning faster and higher disposable income, the perception is soon changing. The younger generation which is now ready to invest in their first homes is well travelled and aware about the infrastructure facilities that can improve quality of and are ready to pay a premium for the same. This comes across as a huge boost for the real estate builders and developers to ideate and introduce differentiated concepts catering to the demands of these consumers.
Millennials have just begun to shape the housing market. As their incomes increase with age, they will continue to effect change. And as they continue to rely on their parents for sound advice on purchase decisions, projects from credible and established developers find preference. The residential market in India is undergoing a major transformation and the new influences driving it are evident. Developers need to understand the behavioral patterns if you’re going to be able to create millennial-friendly sales, customer experience and customer service approach.With the country moving in the direction of economic liberalization, millennials are well aware of the window of opportunity to action the home buying process to reap better benefits in the future.