Apart from cars and super gadgets, millennials are in the fast-lane when it comes to buying a house as well.
More than one-third or about 36 per cent of home buyers today are under 35 years of age as easy financing options and availability of smaller units is allowing the millennials to own a house much earlier than the conventional age of over 40.
In the housing market, the influence of the millennials, aged between 25 and 35, is growing and is closely behind the 35-45 age group, which comprises slightly over 40 per cent of the buyer base, according to a report by 360 Realtors.
“Earlier, purchasing a home was a decision that was mostly deferred till a later age. However, with the availability of easy leverage coupled with the advent of attractive payment plans, young buyers are now entering the market in a big way,” 360 Realtors founder and Managing Director Ankit Kansal told BusinessLine.
Increase in income levels
Rohit Poddar, Managing Director, Poddar Housing and Development, said there is a substantial increase in real income levels for youngsters, who are gainfully employed straight out of campuses as compared to 30 years ago.
“Moreover, access to home loans from banks as well as other financial institutions has become much easier for potential home buyers and they are not risk averse like the previous generation,” he said.
Samantak Das, Chief Economist and Head of Research at JLL India, said Indians value home ownership more than rental, be they millennials or relatively older people. “In India, the rental system is not institutionalised and remains highly unorganised. Several hindrances like repeated lease renewals, interference from landlords and dealing with brokers have led to a greater preference for ownership,” he said.
Moreover, the youth are getting a buying boost because of the spurt in smaller units like one-BHKs, studio apartments and micro-homes, which are generally priced in the ₹30/40-lakh range. “This bracket is the sweet spot of majority of young buyers. With low prices, these units offer lower barrier to investment,” Kansal said.
JLL’s Das pointed out that in the last two-three years, a lot of supply has also come in the compact houses segment, which are scientifically designed. “With a focus on affordable housing, the schemes offering good incentives to buyers and developers are giving an impetus to sales,” he added.
Moreover, these compact units can be put up on rent easily in case the owner decides to move city. “Small units offer better rental yields compared to bigger apartments,” Kansal said, pointing to the fact that while a one-BHK in Mumbai will give a yield of 3.20 per cent, it is 2.10 per cent for a three- BHK.
Being compact, such units are increasingly becoming part of larger retail and office space development to promote walk-to-work culture. “This adds to their popularity among young buyers,” he added.