Adarsh Jain personifies the driving force behind the changes in the Indian housing market.
The 27-year-old software engineer from Tihu, a small town in Assam, and his wife who is 28, are looking to buy a “modern, flexible and sustainable” home in Bengaluru. Like many millennials, they belong to the “double income, no kids” group and want to invest in an apartment of their own for practical reasons.
“Sharing my living space with friends as a bachelor was undoubtedly cheaper. However, now as a married couple, the rent we are paying is equivalent to the EMI we would pay for an apartment of our own. So, why not?” Jain said.
Millennials or Generation Y (or those born between 1981 and 1996) are increasingly becoming first-time homebuyers in India after the pandemic, forcing real estate developers to change everything from the design of the homes to the way they try to woo potential buyers.
For instance, 41 per cent of home buyers in Mumbai this year until September belonged to the 26-41 age bracket, according to property consultancy Knight Frank India. This figure can be considered a competent barometer for the rest of the country, Vivek Rathi, who is director for research at the firm, pointed out.
“There is an emotional context about owning a home and that is the change Covid-19 has brought about,” said Mallanna Sasalu, the chief operating officer of Puravankara’s affordable housing arm Provident Housing, which saw 43 per cent of its inventory sold to millennials in 2022.
Generation Z, which generally includes the cohort born between 1997 - 2012, is also garnering merit in this regard. This group, which purchased 5 per cent of Provident’s inventory in 2021, has quickly grown to occupy a 13.5 per cent share in 2022.
Santhosh Kumar, the vice chairman of property consultancy Anarock, labelled millennials as “new-age homebuyers” and said the trend of younger buyers driving the real estate market was here to stay.
Shivam Pathak, who is a sales manager at TG Developers, also attested to a higher conversion rate (demand translating into purchase) among millennial home buyers in 2022 versus 2021.
The significant stakeholders in the residential real estate market attributed this to a combination of factors including higher disposable incomes, competitive and affordable interest rates for home loans and the post-pandemic shift in mindset favouring ownership over
renting.
Less is more
Property builders have set in motion a string of measures to cater better to millennials.
“These changing preferences have forced developers to go back to the drawing boards and come up with newer home layouts,” said Anarock’s Kumar.
Housing design is evolving to accommodate flexible spaces that can be used as a home office or a yoga studio, multipurpose furniture, updated kitchens, luxurious bathrooms and pet-friendly corners. The objective is to deliver minimalism wrapped in an ultra-modern look, while emphasising sustainability, the developers said.
Millennials are also gravitating towards living in a like-minded community.
“We will never combine a 4 BHK and a 2 BHK (apartment) in the same project,” said Shaifali Singh, the vice-president of DivyaSree Developers, outlining the brand’s philosophy in shaping a compatible circle for its clientele.
Green is gold
Younger buyers are also pushing for more sustainable homes.
“Millennials are conscious about how maintenance costs can be reduced, which is where sustainability comes in,” said Pathak.
They are also willing to pay a premium for greener homes.
“Sustainability has higher initial investment, but it pays out its dividends in the long term,” said Manaal Maniyar, a 29-year-old startup founder.
The growing demand for such homes is pushing real estate developers to set up everything including biogas plants, garbage segregation and treatment facilities, rainwater harvesting units, solar panels and electric vehicle charging stations on their properties.
Builders are also tweaking their marketing strategies to cater better to millennials.
DivyaSree Developers is spending 80 per cent of its marketing budget on digital media and 20 per cent on print publications these days, unlike before when it used to split it equally between the two, Singh said.
Others agreed.
“We’re heavily (present) on the digital media,” said Swaroop Anish, who is the executive director for business development at Prestige Group, adding that it had not given up on print entirely because behind every Indian millennial is a parent who is consulted before purchase.