Millennials prefer experience over ownership
Realty+ in conversation withAbhinav Joshi, Head of Research, CBRE India, learns about the changing trends in the buying and renting market and how millennials are emerging as influencing factors.
Looking at the current real estate scenario, should one rent or buy?
Both renting and buying a home have their own set of advantages and are suited for different requirements. Rental housing is a significant component of the real estate sector in India as it enables greater mobility of workforce especially in the informal sector. Renting a home is also suitable for young professionals who prefer staying closer to their workplaces. Emerging technology- enabled renting platforms have made rental home-seeking much easier, as quality property listings catering to customers’ preferences, are available with a tap of a smartphone.
Owning property assumes significance for older age- group who prefer staying in a particular city or location for long. It is also a preferred option for young professionals and couples who prefer to have the stability and security of their own home.
Is purchasing property still a favoriteinvestment asset among Indians?
Currently, there is too much reliance on the house ownership at the expense of other models of dwelling. Owning a home is considered a source of social and financial security in India. Another key factor here is that the rental housing market in India is largely unorganised, with formal lease agreements and terms not being very standard/formal. Also, rent control laws keeps a significant portion of buildings in central parts of cities such as Mumbai and Delhi, out of the scope of being developed for rental housing.
Does the millennial ideology promote renting over buying?
According to the CBRE India Millennial Survey, 68% of the survey respondents that are not living with their parents choose to rent. Their choices are based on location, quality of property and other factors – but on expected lines location emerges as the top priority for almost 70% millennials. One of the most important aspects that distinguish the current generation of millennials from its previous one is that they are focused on utility and experiences rather than ownership. Thus, a rented home located very near to one’s workplace with good connectivity is preferable to a young professional than an owned house located in the suburbs. In fact, 69% of millennials in our survey state employment as the top factor that results in them moving out of their parents homes. Cost also plays an important role in impacting the millennials’ perception regarding ownership of property.
Rented homes also enable them to stay with friends and share the cost of living as living away from parents at times can get expensive. Sometimes there are also constraints or non-availability of owing a house and therefore they have to opt for rented home.