Table of contents
- Embracing Changing Times, Changing Minds
- Evolving Landscape of Homeownership
- Reasons Behind The Change
- Advantages of Owning a Home Early
- Building the Nest
Embracing Changing Times, Changing Minds
The narrative surrounding millennials has undergone a dramatic shift. Once known as the “renter generation,” content with a nomadic lifestyle and prioritising experiences over possessions, they are now surprising everyone by embracing homeownership earlier than ever before. Time, situation, career advancements and many other factors are boosting this changing trend.
The COVID-19 pandemic played a significant role in this shift. Many millennials who had migrated to bustling metro cities in search of career opportunities and a vibrant lifestyle were forced to re-evaluate their priorities. Lockdowns and remote work options opened their eyes to the value of a slower pace of life and a stronger connection to their roots. Returning to their hometowns, they rediscovered the peace and quiet of smaller towns, the comfort of familiar surroundings, and the importance of a close-knit community.
This homecoming experience also led to a renewed appreciation for the value of owning a property in their hometown. Witnessing their parents’ secure and comfortable lives in their own homes fuelled a desire for similar stability and a space they could call their own.
Today’s young generation is embracing the concept of “nesting” earlier than ever before. This article explores how millennials are changing the housing market, the reasons behind this evolving trend, the growing desire for homeownership among millennials, and the advantages of taking the plunge early on.
Evolving Landscape of Homeownership
Traditionally, the Indian dream revolved around a secure government job, marriage in the early twenties, and eventually, owning a home. However, the economic liberalisation of the 1990s and the rise of the knowledge economy led to a new reality. Millennials, with their higher disposable incomes and global exposure, prioritised career growth and personal experiences. Renting seemed like a convenient and flexible option, especially in the initial years of their careers.
Reasons Behind The Change
Several factors are contributing to the rising tide of millennial home ownership in India. These are a few known and important factors that are attributing to the shift in the millennial mindset towards owning real estate at an early age.
- Financial Empowerment – Millennials are entering the workforce with better salaries and a growing understanding of financial planning. The pandemic taught most people the value of many things and one of them is money. This allowed millennials to save for a down payment and secure home loans at an earlier stage.
- Shifting Priorities – While travel and experiences remain important, millennials are increasingly prioritising stability and security. Owning a home offers a sense of belonging and a concrete investment for the future.
- Evolving Job Market – With work-from-home opportunities on the rise or a growing focus on hybrid work life along with the rise of the gig economy, there has been a reduction in geographic constraints, making local homeownership a more attractive option.
- Rising Rent vs. Stable Mortgage Payments – It has been noticed that the rent in major Indian cities such as Bengaluru, Delhi/NCR, Mumbai, Pune, etc., has been steadily increasing. In many cases, a mortgage payment can be comparable to, or even lower than, rent, making homeownership a more financially attractive option.
- Government Initiatives – Our government has come up with several initiatives, such as tax benefits for first-time homebuyers, Pradhan Mantri Awas Yojana, and easier access to loans, which are incentivising millennials to enter the housing market.
Advantages of Owning a Home Early
There are several advantages to buying a home early in life:
- Lower Interest Rates: The sooner you buy, the longer time you get to benefit from lower interest rates on your home loan. This can significantly reduce the overall cost of ownership.
- Financial Discipline: The process of saving for a down payment and managing a mortgage payment instils financial discipline and good credit habits that benefit throughout life.
- Lifestyle Benefits: Owning a home can improve your overall well-being. Having a personal space to customise and enjoy can contribute to a sense of stability and comfort.
- Increased Tax Benefits: First-time homebuyers in India can avail of significant tax benefits on their home loan interest and principal repayment. Taking advantage of these benefits early on can provide significant financial savings.
Building the Nest
The decision to buy a home is a significant one and is a dream of almost everyone. However, the millennials and real estate trends seem to be a positive development. Owning a home offers a sense of security, stability, and long-term financial benefits. As the saying goes, “There’s no place like home,” for a generation that values experiences and security, it fits appropriately.
