How Millennials Are Changing the Indian Real Estate Market

As millennials are emerging as a more influential group of home buyers and investors, India's real estate market is changing. This generation have entered a world of rapid digitalization and their decisions on the purchase of property are different from previous generations. Other considerations, such as connectivity, work-life balance, technology, flexible spaces and long-term value, are now playing a larger role in their decision-making. The millennial generation also does a lot of research before heading to a project – they do some online research on projects, developers, prices, and neighborhoods. Their preferences are promoting rethinking of residential design, customer engagement, and even targeting locations. As it moves to prime age to earn and form households, this cohort is making their mark on the Indian real estate ecosystem.

Why Are Millennials Important to Indian Real Estate?

Millennials are entering the property market at a time when Indian cities are expanding and housing choices are becoming more diverse. They frequently research extensively online when purchasing a property, instead of blindly relying on the advice of family and property brokers.

They do a comparison of the layout and the cost of the apartments, connectivity, and the various amenities on offer, as well as the developer's records before they arrive at a narrowing down of choices. Many also take into account rental opportunities and future resale value. This has led to a more information-based purchasing process.

In response, developers are increasingly making their project information more accessible digitally and emphasizing features that meet real-life needs. The concept of what defines an attractive home is slowly changing from "more room" to “more useful and convenient."

What Do Millennials Look for in a Home? 

The factors that millennials look at when purchasing a home typically revolve around how well it fits their lifestyle. If an apartment is too far from your work, or if the maintenance fees are too high, it may not be the best choice.

Accessibility: Access to offices, metro stations, highways, schools and healthcare facilities can be a factor that could affect location.

Flexible spaces and efficient layouts: Spaces that are flexible and can be used without additional square footage are more valuable than extra square footage.

Lifestyle facilities: Fitness rooms, green spaces, recreation areas and co-working spaces can provide a beneficial purpose.

Technology: Digital buyers are very familiar with virtual tours, online documentation, and “smart-home” things.

Value: If there are a number of projects under consideration, the buyer will often consider future potential, location and specifications when determining value.

How Is Technology Changing the Homebuying Journey?

The way that millennials find and assess properties has been transformed by technology. Buyers can look into developers, compare projects, look at floor plans and study neighborhoods without having to visit multiple sales offices.

Online tours also have made initial property assessment much easier for anyone who is thinking of buying a home, especially for those who are not used to living in the cities that the home is located in. Friction can be further minimized when buying by using digital communication and online documentation.

But the convenience of digital doesn't exceed due diligence. The buyer should ensure RERA registration, approval, title documents, construction status, and other related documents before putting investment into the property.

Why Does Location Matter More to Millennial Buyers?

Location is getting more and more associated with convenience and time. For some, commuting to work has changed, as hybrid and remote work emerge, but access to employment hubs and public transport is still critical.

Other suburbs may also appeal to Millennials if the 'old' suburbs become too expensive. But improvements to the road network, metro links and expansion of social infrastructure can enhance the appeal of a peripheral location.

But future infrastructure should not be seen as a certain source of appreciation. It is important for buyers to determine if promised development and connectivity are moving forward.

How Are Millennials Influencing Home Design?

Design of residential properties is also being influenced by millennial lifestyles. With working from home and flexible working hours, as well as changing family needs, there has been a rise in demand for multi-functional spaces.

Balconies, natural light, multipurpose rooms, common work areas, and efficient layouts are thus increasingly a subject of developers' attention. The shift is slowly taking place from square footage to usable space.

This strategy could be especially important for younger homeowners who have other expenses to take care of in addition to paying their mortgage. The well-thought-out apartment might be more useful than the spacious house that is underused.

Are Millennials Choosing to Rent or Buy?

There is no one type of housing for millennials. Many people like to rent in the early part of their career, as it gives them flexibility when it comes to changing jobs or when jobs change their lives.

Others prefer to wait until they're more stable financially, and they can save up enough. These buyers might be looking to own their homes long-term and as an investment vehicle as well.

This doesn't always mean that renting and purchasing are mutually exclusive options. The choice is usually based on job security, cost, proximity, savings and anticipated length of stay.

How Are Millennials Changing Real Estate Investment?

Millennial investors are becoming more interested in other aspects of investing than just price appreciation. Their evaluation may be affected by the demand for rents, the state of the infrastructure, the credibility of the developers, liquidity and the possibility of future resale.

Some investors choose to develop corridors with growing infrastructure; others favor the more established areas with known rental demand. The Internet has also helped simplify the comparison of markets before investing money.

However, there are risks associated with emerging sites. Investors must distinguish between planned development and infrastructure that has actually been put into operation.

What Does the Millennial Shift Mean for Developers?

Developers are trying to get in by bringing digital engagement with more flexible residential products. The Internet makes it easy for buyers to research competing projects before making contact with a developer, and transparency and easy information sharing are becoming paramount.

The change doesn't just affect marketing. Developers need to understand the habits of younger home buyers, the actual features they value and how much of them will they pay to acquire. Thus, the design of practicality, connectivity and flexibility are increasingly becoming crucial in the context of residences.

Conclusion

Millennials are not revolutionizing the basic tenets of Indian real estate, but rather they are altering the way those tenets are measured. Price and location are not enough; the importance of connectivity and functionality and technology and long-term value is growing. As this generation grows into a more entrenched cohort of homeowners and investors, developers will need to meet more savvy, tech-savvy consumers. Millennials themselves have more information available to them, which means they have more options, but it also means they must compare and perform diligence on the properties they are interested in.