Rise of millennials is changing Indian real estate landscap
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Changing landscape of real estate in India – The rise of millennials
- In India, there are more than 400 million millennials, which is more than the whole population of the United States!
- In our country, millennials aged 25 to 40 have an estimated spending capability of $3.6 billion and account for 1/3rd of the total spending of the total population and nearly half of the employed people.
- As per the recent market trends, real estate sales in India peaked in July at their highest level in decade. A shift in spending behavior was noticed as a result of a significant push from millennials generated by the COVID-19 pandemic, with individuals who preferred to rent becoming more likely to buy a property.
- We understand how essential a work-life balance and financial stability are to you at IFCCL. As a result, we provide strategic valuation services to help you plan for the future you need.
Future Scope of the Real Estate Market in India.
- By 2040, India’s real estate market is expected to rise to rupee 65000 cr which is equivalent to 9.30 billion dollars, a significant increase from rupee 12000 cr which is equivalent to 1.72 billion dollars.
- By 2030, the Indian real estate sector is predicted to have market equity of 1 trillion dollars, up from 120 billion in 2017, by 2025 it contribute about 13% of the country’s GDP.
- The rapidly developing commercial, hospitality and retail sectors in real estate are so responsible for providing India’s ever-growing demands with much-needed contemporary infrastructure.
According to ICRA forecasts,
- Indian companies would raise more than 3.5 trillion rupees which is equivalent to 48 billion dollars through infrastructure development and real estate investment funds in 2022, despite only raising funds worth 29 billion dollars so far.
- New housing project launches in India’s top eight cities are expected to total roughly 86,139 units. However, home sales volume was nearly twice in the latest quarter, from 33,403 units in the third quarter of 2020 to 61,593 units, indicating a solid rebound of the real estate business despite the COVID-19 lockdown.
- According to the conclusive statistics from the Economic Times Housing Finance Summit, roughly 3 houses are built per 1000 people each year, which is fewer than the required rate of 5 homes per 1000 people.
- As a result, the present shortfall of housing options in cities is estimated to reach around 10 million units. To fulfill the explaining demands of our country’s urban population, an extra twenty-five million affordable housing units will be necessary by 2030.
Prevalent Patterns in Millennial Spending Behavior
- Millennials in India were widely regarded as big spenders, a generation that prioritized immediate gratification above long-term planning. As a result, they choose ride-sharing applications like Ola & Uber versus purchasing a car and dealing with upkeep, repair, petrol, and EMIs. They used the same logic when it came to homeownership, opting to rent rather than buy.
- Although such millennial spending remained until early 2020, when the COVID-19 pandemic swept the globe, it has changed dramatically in the recent year. According to several assessments, millennials’ largest spending group was finally getting serious about their money.
However, the sudden behavioral change can be chalked up to three significant factors:
- The millennial generation is maturing and realizing their sole providers to their families.
- Covid/pandemic-introduced lockdown exposed the unsustainable nature of wasteful expenditure.
- Incensing of work from home culture & which is widespread global acceptance.
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Evidence of Change In Millennial Spending Behavior
- A recent news study showed a dramatic shift in millennial spending habits. According to the report, millennials who were previously accustomed to borrowing for recreation and lifestyle maintenance are now placing a higher priority on their house and familiar duties.
- Standard Chartered Bank conducted various investigations and came to the conclusion that millennials are most likely to use strategic planning to achieve their long term financial goals. According to the report, 48% of Indian millennials save for a major purchase such as a home or automobile.
- In a study done by 360 Realtors, a similar approach to meeting financial obligations were also represented. Approximately 75% of millennials expressed a desire to become homeowners in the near future.
- One of the big Property Consultants conducted a similar analysis of the real estate market, finding that 55 percent of all prospective homebuyers were in the millennial age group, up from 42 percent the previous year. In addition, 68 percent of the millennials polled expressed an interest in purchasing residential homes for their own usage.
- Another significant real estate platform, nobroker.com, said that its whole client base earlier was 42% millennials before the COVID, but that this had increased to 63 in post COVID era. For the city of Mumbai, the percentage grew even further to 74%.
Impact of COVID-19 on Millennial Spending Behavior
- The COVID19 Pandemic has contributed significantly to the recent change in millennial spending toward residential real estate investments.
- Other pandemic related elements, however, also have a role in encouraging such an attitude shift.
- The WFH culture’s global popularity has encouraged both businesses and millennial workers to adopt a hybrid work paradigm. Daily presence at the office is not seen as a sustainable future framework in today’s work culture.
- It also assures that job mobility and city hopping are not priorities.
- Millennial buyers have been able to realise their ambitions of owning a property away from the hustle and bustle of the city thanks to the availability of credit and the flexibility of commute-free remote work. . It also allows them to balance their work responsibilities at home with their family obligations.
- First time millennials, homebuyers, and those looking to invest in a second home have benefited from the optimal combination of numerous government subsidies and record-breaking low-interest rates that can’t possibly lower.
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