Why millennial Indians don't prefer to buy homes anymore

The average age group of homebuyers across India has come a full circle, it appears. From a steady drop over the post-liberalisation period, lifestyle changes have interjected in recent years what realty markets estimate could be a dramatic shift.

A study by real estate consultant ANAROCK on the age and demographics of property buyers across Indian cities shows that the average age of Indians buying property had consistently come down since the late nineties—until now. “Millennials are (now) rethinking the notion of buying homes,” says Prashant Thakur, director & head, research, ANAROCK.

Until several years into liberalisation, many Indians preferred to buy homes using savings rather than home loans. This meant homebuyers were usually in their fifties, closer to retirement. Admittedly, banks were also reluctant to lend large amounts during this period, even as younger Indians were cautious about bank loans, considering them risky.

Then, boom times struck, with age of property buyers coming down to as low as 35 post 2000, thanks to easily available home loans and their tax benefits. Young homebuyers warmed up significantly to the notion of using borrowed funds rather than depleting all their savings.

This steady decrease in age group of people snapping up property continued till around 2016, according to ANAROCK. While buyers were largely in the 35-55 age group, improved tax benefits was motivating even more working youth, some as young as 25, to go for homes through loans. “Millennials predominantly favoured paying EMIs to own a home over the 'dead' expense of rentals,” points out Thakur.

But that seems to have dramatically changed now. Thakur refers to it as a 'tectonic shift' in the report. He explains, “Many millennials are (now) rethinking the notion of buying (home) at this relatively early age. The tendency now is to avoid large investments and instead invest in other asset classes.”