Home ownership: a priority for young Indians
The COVID-19 pandemic has shifted young Indians’ home options - from rental or co-living to home ownership.
It’s no surprise that young Indians generally prefer the experiences and living standards acquired through a more flexible lifestyle, as compared to a sedentary lifestyle tied to permanent housing. This is especially the case among younger millennials born between 1989-1996 and generation Z, born between 1997-2012. This preference in lifestyle was reflected in their choice of living spaces – such as rental and co-living over ownership, proximity to the workplace over a home in distant suburbs, until the recent COVID-19 pandemic.
How did the global pandemic shift the notion of younger Indians towards home ownership?
In the last few decades, India has witnessed a dramatic demographic transition to become one of the youngest major economies. In terms of demographic dividend, the median age of the working population stood at a youthful 28 years in 2021. The newer generation grew up with minimal adult supervision, hence are high on independence and mobility. They have been known for exploring life and careers. These optimistic, digital natives and ambitious young Indians were soon to drive the country’s labour market.
However, the recent COVID-19 pandemic reshaped the country’s social and economic landscape. It remarkably elevated the need to be scrimp, as economic uncertainties remained front and centre, leading to disappearing jobs and salary cuts, especially among the youth. As a result, many took the pandemic as an opportunity to redefine their choices in lifestyle, while others put greater emphasis on accentuating stable investments.
Living in rented apartments became increasingly difficult due to the volatile rental market, job insecurity, added chores and higher expenditure. The pandemic also injects some doubts into the popular co-living concept because of potential risks to health and security. In addition, the culture of work from home/flexible working further leads to the re-emergence of demand for homes in many far-off suburbs and Tier-2 cities away from dense city centres. In hindsight, the younger Indians preferred living in spacious, hygienic, and owned homes that accommodated their supplementary needs even if not located in the city centre.
To sum it up, the pandemic led to a paradigm shift from a nomadic, flexible way of living towards a more secure lifestyle among the young Indians. These changes in the preferences were further supported by the government incentives offered during the pandemic, such as reduced interest rates on home loans, tax rebates and a first-time homeowner’s policy. These significant benefits, coupled with the realistic real estate options, additional discounts offered by the developer and increased supply triggered a remarkable shift to achieve the otherwise impossible-looking standard of living through home ownership among the young Indians.
With the plateaued and now slowly declining pandemic, the question arises - Is this notion here to stay? Like any other major upheavals, the pandemic indeed prompted an urge for flight to safety and security. However, it is yet to be seen if this trend will be permanent or dilute in the near future.