The generation born between 1981 and 1996 is known as the Millennial generation. In a youthful country like India, this age group constitutes a significant portion of the population. With a staggering 440 million people, or 34% of India's overall population, millennials are the largest generation in the country.
When such a vast segment of the population suddenly shows interest in investing in housing, it catches the attention of the real estate market. As has been extensively covered, Indian millennials have recently become active homebuyers following the COVID-19 pandemic. After abstaining from this investment category for several years, this sudden shift in behaviour has had a noticeable impact on the property market, setting some new homebuying trends.
The Background
Initially, real estate developers and brokers attributed the surge in homebuying activity among millennials to the widespread adoption of remote work arrangements due to the pandemic. However, this trend has persisted, becoming a significant factor in the housing market.
Millennials are a crucial driving force behind the housing market, not just because of the sudden demand for housing but also because they are in their prime "buying years." They have already established themselves in their careers and can access home loans. In fact, millennials accounted for more than 50% of home purchases in 2020, making them an essential demographic that influences the housing market's direction. Their needs and preferences now shape the trajectory of the industry.
The COVID-19 pandemic served as a pivotal moment that spurred Indian millennials to invest in residential real estate at unprecedented levels. The lockdowns and overall concern for health and financial security during the crisis led to this shift in behaviour. Additionally, millennials benefited from the widespread adoption of remote work, which allowed them to prioritise their living arrangements over proximity to their workplace.
Many Indian millennials work in the information technology (IT) sector, which is dominant in the country's job market. While many companies in other industries are pushing for employees to return to in-person work, IT employees at the most prominent software firms are demanding more flexibility than before. This demand for flexibility reflects the changing priorities of this influential demographic in the workforce.
As more IT companies in India acknowledge the importance of flexibility in their employees' work arrangements, remote and flexible work remain viable options for many millennials. This work culture shift has changed how millennials approach the housing market, with greater emphasis on property size rather than location. As a result, inner-city locations that were previously highly sought after by millennials have lost some of their appeal.
Many Indian millennials are now exploring more affordable housing options on the outskirts of major cities or even in smaller cities that were not traditionally considered attractive property markets. In response to this new demand, real estate developers are actively producing housing supplies tailored to the needs and preferences of millennials.
Overall, the growing trend of remote and flexible work arrangements has significantly impacted the housing market in India, with millennials playing a vital role in driving this shift.
What do millennials want in a home? – The latest home trends
Configuration
For years, only a tiny fraction of Indian millennials were interested in buying homes and preferred compact housing units near their workplaces. This trend led to a surge in small-format housing projects in and around the primary IT hubs. However, the demand for micro-homes in these locations has drastically reduced, and larger configurations like 1.5, 2, 2.5, and 3 BHKs have become more popular among millennials.
The ability to have a home office remains a significant factor for millennials who continue to have a hybrid work arrangement or work remotely. As such, homes that offer adequate space for a dedicated work area have become more desirable. Overall, millennials in India are now looking for more spacious homes that cater to their evolving lifestyle needs.
Location Matters
Millennials value convenience and accessibility, and hence location is one of the most crucial factors when it comes to buying a home. Millennials prefer to stay in areas close to their workplace, schools, hospitals, and other amenities. Proximity to public transportation is also a crucial factor. Walkability is also increasingly important to them, as they prefer to live in neighbourhoods where they can easily walk or take a bike or an auto to restaurants, cafes, and shops.
Smart homes
Millennial homebuyers in India also want smart home features that provide comfort and convenience through electronically and digitally-enabled homes. They want homes equipped with the latest technology, such as voice-activated assistants, smart thermostats, and security systems. They also prefer homes with high-speed internet connectivity, as they rely heavily on technology for work and entertainment.
Eco-friendly homes
Millennials are environmentally conscious and value energy efficiency and sustainability. They prefer homes with high-efficiency appliances, energy-efficient lighting, and solar panels. They also prefer homes that are constructed using sustainable materials and have features such as rainwater harvesting and composting systems.
These tech-savvy buyers are keen on sustainable living practices and are driving demand for green homes with a lower environmental impact during construction and use. As such, real estate developers adapt to these changing preferences and incorporate eco-friendly features in their projects to cater to millennial buyers. The rising demand for green homes and smart home features reflects the broader shift towards sustainable living and adopting new technologies in the Indian housing market.
Open Floor Plans and Natural Light
Gone are the days of closed-off kitchens and formal dining rooms. Millennials prefer open floor plans that allow for more flexible use of space. They also value natural light, and homes with large windows, skylights, and glass doors are more appealing to them.
Outdoor Spaces
Outdoor living spaces are becoming increasingly important to a millennial house. They value homes with patios, balconies, and rooftop terraces that allow them to enjoy the outdoors and entertain guests. They also prefer homes with access to green spaces like parks and community gardens.
Flexibility
Millennials value flexibility and want homes that can adapt to their changing needs. They prefer homes with multi-purpose rooms that can be used as a home office, gym, or guest room. They also value homes with flexible spaces that can be easily reconfigured to accommodate different activities.
Community
Community is important to millennials. With most people working in metro cities away from their home town, their preference is such that they can connect with like-minded people and form a sense of community. This is why co-living spaces and mixed-use developments are so popular among millennials. They would pick areas where they can easily meet new people and access amenities like coworking spaces, fitness centres, and social events.
Affordability
Lastly, affordability is a major concern for millennials. They want to be able to buy a home without breaking the bank. This is why smaller homes and condos are popular among millennial homebuyers. They are also more likely to consider purchasing a home with friends or family members to split the cost.
Conclusion
Millennials are changing the homebuying game with their unique preferences and requirements. They prefer homes in convenient and accessible areas, equipped with smart features, open floor plans, natural light, outdoor spaces, energy-efficient and sustainable, flexible, and equipped with the latest smart home technology. As more and more millennials enter the real estate market, builders and developers need to keep up with these trends and adapt their offerings to meet their needs.
