India's housing market is undergoing a dramatic transformation. As we move towards 2030, it is predicted that nearly 60% of new homebuyers will be from the Millennial and Gen Z generations. This shift is not just a trend but a reflection of deeper changes in the economy, technology, and consumer behavior.
The Growing Presence of Millennials and Gen Z in Real Estate
Millennials, born between the early 1980s and the mid-1990s, and Gen Z, born between the late 1990s and early 2010s, are becoming the dominant force in the Indian housing market. As more young people join the workforce and start to build families, the demand for homes is expected to skyrocket. According to a report by JLL, a global real estate services firm, Millennials and Gen Z will account for 60% of new home purchases by 2030.
These generations have different priorities compared to previous ones. They are tech-savvy, sustainability-conscious, and focused on affordability. Their preferences are shaping the housing market in exciting ways, with technology, smart homes, and eco-friendly living spaces becoming increasingly important.
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The Growing Homeownership Rate
One of the most significant shifts is the rising homeownership rate. In 2020, only 65% of people in urban India owned their homes. However, this number is expected to rise to 72% by 2025, according to JLL’s projections. This increase will be driven by several factors, including affordable financing options, government policies supporting homeownership, and the growing number of young buyers entering the market.
This shift represents not just a change in who is buying homes but also how they are purchasing them. Younger buyers are increasingly able to secure home loans and finance their dream homes thanks to a more favorable lending environment. As a result, homeownership is becoming a more attainable goal for many Millennials and Gen Z individuals.
India’s Housing Market: Poised for Growth
The housing market in India is expected to reach a milestone in the next few years. With the increasing demand for housing, the sector is anticipated to contribute 13% to India's GDP by 2025. This is especially true as more people move to urban areas in search of job opportunities and a better standard of living.
India’s housing market is also poised to grow into a $1 trillion market by 2030. This projected growth is fueled by rapid urbanization, policy reforms, and the rising purchasing power of young buyers. The country’s real estate market is evolving in response to demographic shifts and changing consumer preferences.
The Growth of Tier II and III Cities in Real Estate
Another important change in the real estate landscape is the growth of second and third tier cities. Traditionally, the real estate market in India was concentrated in major urban areas such as Mumbai, Delhi and Bangalore. However, due to the large number of people moving to a small town to find affordable housing, places like Jaipur, Indore and Kochi are emerging as major growth centres. And these cities are expected to drive more than 40% of new housing development by 2025.
The rise of these smaller cities is opening up new opportunities for homebuyers who may not be able to afford properties in larger, more expensive cities. The availability of affordable housing in these areas, coupled with better infrastructure and improved job prospects, is attracting younger buyers looking for homes that fit their budgets and lifestyles.
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Sustainability Takes Center Stage
In the housing market sustainability is not a luxury. But it is necessary. This is because concerns about climate change and its impact on the environment are increasing. Green building certifications such as LEED (Leaders in Energy and Environmental Design) are becoming more widespread. This is because buyers and developers place an emphasis on environmentally friendly and energy-efficient buildings. And the demand for sustainable living space is increasing.
By 2025, 30% of new housing projects are expected to be green certified. This is a significant increase from just 15% in 2020. Buyers are now more aware of the environmental impact of their homes. Many people are looking for real estate that matches their price, smart homes, and energy-saving appliances. and environmentally friendly construction materials It has become an important selling point in the real estate market.
The Demand for Smart Homes and Affordable Housing
In addition to sustainability there is also an increasing demand for smart homes and living spaces that use integrated technology. Young buyers are looking for homes that provide comfort, safety and energy efficiency through advanced technology. Smart appliances home automation system and comprehensive security features It's becoming increasingly popular among Millennial and Gen Z buyers.
At the same time, affordable housing remains a critical focus in India. Despite the rising demand for high-tech homes, budget-friendly options are essential for many buyers. Developers are responding by creating more affordable housing solutions that cater to the needs of first-time homebuyers and young families.
The Year 2024: A Year of Growth
The Indian housing market is already showing signs of growth, with sales in 2024 expected to be 85% of the total units sold in 2023. This represents a 17% increase in sales compared to the previous year, a promising sign of the market’s resilience. This upward trajectory is expected to continue, with sustained demand for residential properties fueling long-term growth in the sector.
As the market evolves, the demand for sustainable development, tech-integrated homes, and affordable housing will only increase. The real estate market is adapting to the needs of younger buyers who are shaping the future of homeownership in India.
The housing market in India is on the verge of a major transformation. Millennials and Gen Z will account for the majority of new home buyers by 2030, increasing demand for sustainable housing. Powered by technology and affordability As urbanization continues Second and third tier cities also became more important. The real estate scenario in India looks very different. The future is brighter for the next generation of homebuyers than it is today. Better finances with more options and place more emphasis on sustainability and innovation.
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Ans 1. Millennials and Gen Z are entering the workforce, starting families, and prioritizing homeownership. Their demand for affordable, tech-savvy, and sustainable homes is driving this trend.
Ans 2. Smaller cities like Jaipur, Indore, and Kochi are emerging as real estate growth hubs, offering affordable housing options and improved infrastructure, attracting more buyers.
Ans 3. The housing sector is expected to contribute 13% to India’s GDP by 2025, reflecting strong growth driven by rising demand and favorable policy reforms.
Ans 4. Sustainability is becoming a necessity, with green-certified buildings expected to make up 30% of new residential projects by 2025, driven by consumer demand for eco-friendly homes.
Ans 5. Millennials and Gen Z are highly tech-savvy and are increasingly seeking smart homes with energy-efficient appliances, security features, and home automation systems.
Ans 6. As younger generations start their homeownership journey, they are seeking affordable housing options that fit their budget while offering modern amenities and convenience.
Ans 7. The urban homeownership rate is set to rise to 72% by 2025, up from 65% in 2020, driven by affordable financing options and a younger demographic entering the market.
Ans 8. Technological innovations like smart homes and tech-integrated living spaces are gaining popularity, especially among Millennials and Gen Z who value convenience and modern living solutions.
Ans 9. Tier II and III cities like Jaipur, Indore, and Kochi are set to see over 40% of new housing developments by 2025, as buyers flock to these more affordable locations.
Ans 10. Government policies focused on affordable housing, urban development, and green building certifications will stimulate growth in the housing sector, making homeownership more accessible for younger buyers.