The generational shift in property buying
The age-old generational clash. We all have anecdotes of those. The 20th century resulted in a new word being coined in the English language – Millennials or Generation Y. It’s this generation that is leading to a surge in consumer spending. And it’s more visible in real estate, where Millennials, plush with rising incomes are spending like never before. The economy might go through ups and downs, but when buying homes, Millennials remain optimistic and see their homes as a good investment for the future. And their needs are different, and their aspirations are different compared to older generations.
Power of the Millenials
With more and more Millennials investing in real estate, they are poised to reshape the real estate industry in India. Given that by 2020, 65% of India’s population will be under the age of 35, sellers are keen on getting insights on what Millennials look for when buying a property. Older buyers, on the other hand, are more likely to settle down with a smaller, comfortable nest to match with their changing lifestyle.
A massive percentage of Millennials stay with their parents and with no big expenditure on rent, saving for the future remains their top priority. Given that real estate is one the best investment options, Millennials are turning out to be primary investors in real estate. With higher purchasing power, they don’t mind taking risks in buying property.
Increased demand for luxury properties
Young buyers tend to buy more high-end property. Until the last decade ‘luxury goods’ were usually reserved for those with greying hair and bloated bank balances. However, sellers are betting on this new, comfort-seeking new generation for whom ‘luxury’ is the new normal.
In new research by Bain & Company and Farfetch, Millennials will represent 40% of the global market for luxury homes by 2025.
The younger generation usually purchases their first property for investment and prefer a location that provides high resale value. Even if it means that the property is located far away from the city, they focus on value properties – those that are expected to grow in the near future. The older generation prefers buying properties located close to essential amenities such as hospitals, markets and easily accessible by public transport, even if it requires paying more money upfront.
Deviation from estimated budget
Millennials don’t mind taking big loans to purchase the property of their choice. When they go out property hunting, their estimated budget has a broad range, and it can expand and shrink depending upon the property they like. For example, if they have a budget of Rs 70 lakhs but like a property worth Rs 90 lakhs, they will not mind increasing the loan amount by Rs 20 lakhs.
The older generation, on the other hand, is quite specific about their budget and prefer keeping the loan amount (if at all they need one) to a minimum.
Times, they are changing, and the world of real estate needs to change to match a bold, new brash generation.