Media Evolution of Real Estate Preferences: From Joint Families to Gen Z in India

Evolution of Real Estate Preferences: From Joint Families to Gen Z in India

14 June 2024
Evolution of Real Estate Preferences: From Joint Families to Gen Z in India

Transformation of the Indian Real Estate Sector

The Indian real estate sector has undergone a significant transformation over the past decade. Reflecting on the past ten years, today's market feels almost unrecognizable, mirroring broader economic and social changes across the country.

Previously, typical homebuyers were often middle-aged and part of joint families, with urbanization steadily extending into tier-2 and tier-3 cities. Today, the market is dominated by younger professionals and nuclear families. Rapid migration to metropolitan areas has increased the demand for smaller, more efficient homes. According to ANAROCK Property Consultants, nearly 60% of homebuyers are now under the age of 35, highlighting the growing influence of Millennials and Gen Z. The UN World Urbanization Prospects report predicts that India’s urban population will grow from 34% in 2018 to 40% by 2030, further driving demand for urban housing.

Gone are the days when property searches and transactions required physical visits and extensive paperwork. Nowadays, most research occurs on digital platforms. A study by Google and Bain & Company found that over 80% of real estate searches begin online. The adoption of virtual tours increased by 50% during the pandemic, according to RedSeer, making the home-buying process more convenient and transparent.

The real estate market, once characterized by exorbitant prices and limited financing options, now offers a better balance of supply and demand, more competitive pricing, and diverse investment opportunities like Real Estate Investment Trusts (REITs) and fractional ownership. The Reserve Bank of India’s housing price index shows moderate increases in residential property prices, while government schemes like the Pradhan Mantri Awas Yojana (PMAY) have made homes more affordable, benefiting over 10 million households.

Consumer preferences have also evolved dramatically. Previously, people prioritized larger homes with basic amenities. Today, buyers seek well-designed, modern homes equipped with lifestyle amenities and green features. According to CBRE, 65% of new-age buyers prioritize amenities such as fitness centers, swimming pools, and community spaces. A Knight Frank survey reveals that 57% of buyers prefer properties with green certifications and sustainable features.

Work culture has seen a significant shift, especially with the rise of remote work. Modern home buyers now seek properties that can accommodate home offices and high-speed internet. The pandemic has solidified remote work as a norm for many. A Deloitte survey indicates that 48% of buyers look for homes with dedicated office spaces, underscoring how remote work influences purchasing decisions.

Government Initiatives and Economic Reforms

Government incentives, diverse financing options, and economic reforms like RERA (Real Estate Regulation and Development Act) and GST (Goods and Services Tax) have made property ownership more accessible. Data from the National Housing Bank shows a 15% year-on-year increase in home loan disbursements, driven by low interest rates and flexible options. The implementation of RERA has improved market transparency and buyer protection, leading to a 20% increase in homebuyer confidence, according to a FICCI survey.

Revolutionizing Access to Information

Access to information and decision-making in real estate has been revolutionized. A decade ago, buyers relied heavily on real estate agents and had limited information. Today, extensive online resources, social media, and real estate portals influence over 70% of home-buying decisions, according to McKinsey & Company. With online reviews, virtual tours, and detailed project information, buyers can make quicker, more informed decisions.

Rising Demand for Luxury Properties

There’s also been a noticeable rise in the demand for luxury properties. Millennials and Gen Z are increasingly interested in luxury housing, drawn to modern amenities, smart home features, and prime locations. ANAROCK Property Consultants reported that millennials and Gen Z buyers show an increased interest in luxury housing. According to a Knight Frank survey, 57% of luxury home buyers in India are aged 25-40, primarily including Millennials and the oldest Gen Z cohort. A study by JLL India revealed that these buyers prioritize lifestyle amenities like fitness centers, swimming pools, and community spaces, which are typically found in luxury properties.

Impact of the COVID-19 Pandemic

The COVID-19 pandemic has also influenced younger buyers’ preferences. A Deloitte survey found that 72% of Millennials and Gen Z are willing to pay a premium for homes with energy-efficient features and smart home PropTech. Younger generations are drawn to urban living and the investment potential of luxury properties. A report by the Real Estate Institute of India indicates that 60% of Millennials and Gen Z consider real estate a critical part of their investment portfolio, with a significant portion interested in high-end properties in urban centers.

A Decade of Change

The Indian real estate sector has experienced big changes over the past decade. The market has shifted towards younger homebuyers, digital transactions, and urban housing, driven by rapid urbanization and evolving consumer preferences. Government initiatives and economic reforms have improved accessibility and affordability, while PropTech advancements have streamlined the buying process. Modern buyers now prioritize well-designed, amenity-rich, and sustainable homes, with a growing interest in luxury properties. This dynamic and responsive market offers a variety of opportunities for all stakeholders, ensuring continued growth and transformation.

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