Millennials are a class apart – in terms of the income earned, spending habits, saving habits, and their lifestyle. They save for their future, yet do not hesitate in spending on themselves.
Their individual decisions have collectively impacted many sectors. The real estate developers and the lenders providing home loans are directly impacted by the decisions taken by the millennials. Let’s see how.
Employment Beyond Hometown
Higher education and global employment opportunities require many young adults to move farther from their parents. This leads to an increased demand for new homes or homes on a rental basis. This is one of the important factors which results in rising demand for real estate properties year after year.
Lenders provide financing at attractive home loan interest rates. Easy access to funds for buying a property helps millennials achieve their dreams.
Rising Income Levels
Income levels in current times are exponentially higher than what our parents or grandparents might have earned. When both spouses are educated and earn well, they can afford the luxury. Besides, many young couples prefer not to have children. All these factors leave the millennials with much more disposable income.
Millennials are willing to spend on good-quality homes designed by reputed builders. They are also excited about designing their homes tastefully.
They even go the extra mile of taking out a loan just to make sure that the construction of their dream home does not face any financial constraints. You can use the home loan EMI calculator to compare the EMIs over different tenures and interest rates.
New and Smart Homes
Data suggest that millennials prefer to buy homes in new constructions rather than homes on a resale basis. People who can afford to pay a premium for the developer’s brand invest in the under-construction properties of a reputed developer.
Many developers design eco-friendly buildings and homes. It strikes a chord with the environment-conscious millennials. Further, such homes are designed in a futuristic manner. For example, the greater durability of construction materials ensures that the future maintenance cost is low. Besides, better internet connectivity in all areas increases your freedom of movement across the house.
Moreover, opting for a home loan ensures that there is no cash crunch in the initial phases even if you wish to overspend slightly.
Shift from Cities to Interiors
COVID-19 has encouraged many millennials to work remotely from the place of their choice. They now choose to live in larger homes in Tier-II or Tier-III cities as compared to small houses in big cities. Due to the ease in the accessibility of home loans, some millennials also invest in a property with an adjoining land area where they can do organic farming. This has led to an increased demand for properties in Tier-II and Tier-III towns. Some properties have also been purchased at prices much higher than the market prices.
Home loan interest rates are generally lower than personal loan interest rates. This further encourages the buyers to opt for a larger home in Tier-II and Tier-III cities.
Rent vs. Ownership
Many individuals keep on moving from one place to another. It may be due to the nature of their job or their desire to travel places. They live in rented premises in all places and prefer not to own their own home. Once they move to a different city, they acquire new property for rent.
Often, even the rented home they choose is well equipped, modern, and with housekeeping facilities. The demand for such properties, known as ‘serviced apartments’, is rapidly rising.
The Power of Information
Millennials are well-informed and do their research before making decisions. They use their contacts and social media networks to shortlist the place of residence, the ideal property, the estimated purchase price, and registration costs. With this information already available to the buyers, the role of brokers has changed. Brokers now identify good properties, negotiate well and close the deal smoothly.
Besides, millennials expect the home loan lenders to be transparent and upfront about the charges and other costs associated with the borrowing. They use the home loan EMI calculator to arrive at the acceptable EMI based on different principal amounts, interest rates, and tenure.
Investment in Real Estate Funds
Many millennials invest in real estate mutual funds. These mutual funds identify attractive projects and invest in them at an early stage. When such funds receive investment from individuals, more funding is available to the real estate developers. Availability of funds for developers helps them to build good quality projects on a timely basis.
A single individual cannot change the course of the real estate industry – but many millennials taking identical decisions can have a significant impact. The real-estate sector responds by providing good-quality homes equipped with the latest technology. Meanwhile, lenders ensure that millennials can easily access home loans and acquire the property of their choice.