As of early 2023, India overtook China to become the most populous country in the world. Of this population of 1.41 billion, 52% are Millennials or Gen Z, taking the country's youth population well over the global average. This is certainly good news for the economy since the participation of the Millennials and Gen Z in the workforce is the key to India's claim as one of the fastest developing and largest economies globally. This also means that these are the generations with the highest purchasing power and are a market force reshaping the real estate market in the country.
Millennials and Housing Demand
To understand the source of homebuyers' purchasing power, it is important to delve a little deeper into the hiring trends of the services industry. The tech industry is concentrated largely around the country's metro cities and urban areas like Mumbai, Delhi, Bangalore, and Hyderabad. In 2022, nearly 68-70% of the hires in the industry were millennials. About 18-20% of Gen Z also went into employment in the industry. The trend is similar in most city-based services industries and businesses. Of the two, Millennials seem more inclined to buy residential property and put down roots, while Gen Z seems to be enamoured with co-living spaces and the flexibility it has to offer. It is indeed safe to say that much of the homebuying demand in major cities comes from Millennials.
Millennials want what Millennials want.
- Bigger, better living – Unlike earlier generations, the Millennials are not content with the basics or even the glory of merely owning a residence. If there is one generation that has mastered the mantra of living life king-size, this is it. And so are their demands from real estate. This change is quite evident when we look at cities like Mumbai and Delhi, where till a few years back, studio apartments and 1BHK flats were high in demand, but now homebuyers are looking for large, open apartments. This also could have something to do with hybrid work facilities and the need for a home office.
- Rise in technology – Technology plays a key part in most significant changes that we have witnessed in the past few years. Real estate has not remained untouched. From how buildings are conceived and constructed to how homeowners look for projects to invest in, technology has been the driving factor, and the millennials and their needs have much to do with this. Revolutionary tech-powered platforms like Blox that make it possible to buy a residential property in 7 clicks are just what Millennials are looking for. The generation is all about quick decision-making and convenience and commanding services like virtual site visits and 3D renditions of projects that they intend to buy.
- All about going green – The Millennials have become more environmentally conscious than any previous generation. The commitment to sustainability that has powered the world comes predominantly from this generation. This awareness and motivation to remain in harmony with the environment, conserve resources, and reduce carbon emissions extend into real estate. The demand for green housing and net zero energy construction is fuelled by the generation. This sets new real estate industry standards and promotes green projects in India's top cities.
- Smart homes all the way – The Millennials are the first generation in the country that grew up harnessing the power of technology and the Internet. Since millennials have now taken to conducting every single aspect of their daily lives through their smartphones and computers, it naturally extends to their homes. Smart homes powered by the Internet of Things and interconnected devices are the need of the hour, and builders and developers are keen to oblige. Building smart systems that can be controlled and operated remotely is part of the new real estate movement.
- Community building – Unlike earlier generations, the Millennials are leaning more toward community and social networks. This translates directly into how and where they look for housing and residences. Up-and-coming suburbs with good social infrastructure is the place of choice. Top developers and builders are tapping into this need for housing and reshaping how cities evolve with gated complexes and residential communities.
The Indian economy is expanding at a rapid pace, and the services industry is at the core of such expansion. Millennials are now the largest part of the services workforce, with high disposable incomes and purchasing power. They are setting the tone for social life, and owning residential apartments is a part of the Millennial dream. This is a great opportunity for the real estate industry. From ergonomic materials manufacturing to solar power units for residential apartments, from smart security systems to tech-powered home buying portals - there is a whole new world emerging, and the Millennials are the driving force.
