Housing market in Bengaluru attracting more younger buyers

According to CREDAI, millennial homebuyers are looking at affordable category properties ranging from ₹40 to ₹70 lakh

Bengaluru, Pune, Mumbai, Hyderabad, New Delhi and Chennai are among the cities where the average age of homebuyers seems to be dropping with time. Developers said cities like Bengaluru have attracted a huge influx of white collar migration due to IT/ITES, which, combined with other factors, has led to a demand for housing.

Adarsh Narahari, chairman, Media and PR Committee, CREDAI Bengaluru, said millennials, especially those in the IT sector, are earning handsome salaries and this trend has built confidence among the younger generation to consider real estate investments seriously.

“The earnings of millennials have gone up significantly compared to earlier generations when they were of a similar age. Today, owning a house has become a priority and an easier possibility through home loans. The RERA Act and GST have increased trust among homebuyers, along with other governmental benefits like tax reduction and subsidies,” said Mr. Narahari.

Young home owners are also availing benefits of the Pradhan Mantri Awas Yojana which gives an impetus to the affordable housing market.

Reeza Sebastian, president, Residential Business, Embassy Group, said that traditionally, people invest in buying a home in their mid-30s as a post-retirement security. But over the last decade, with the boom in the globalised workforce, there has been significant shift in the mindset and purchase behaviour of potential homebuyers with the average age group of homebuyers reducing from 38 years to 28 years.

Ashish R. Puravankara, MD, Puravankara Ltd., said there has been a spur in the demand for homes in the 31 to 40 age group in the recent years compared to the earlier 41 to 50 age group, and that there has been a steady rise in the of 20 to 30 age group too.

What is preferred

Compact homes — one or two BHKs in the affordable category — with potential for resale, well-connected locations, projects by reputed builders are preferred.

According to CREDAI, millennials are looking at affordable category properties ranging from ₹40 to ₹70 lakh.

Mr. Narahari said developers have also started to launch tech-enabled homes to attract millennial investors.

Currently, apartments with different amenities and proximity to the metro station are gaining popularity, he added.

Speaking about Bengaluru, Ms. Sebastian said north Bengaluru is witnessing ‘exponential growth’, making it one of the hottest investment destinations in South India due to multiple national infrastructure projects and wide expressways, proximity to the airport, upcoming business parks, availability of commercial space, social infrastructure assets like schools, hospitals, clubs and improved connectivity towards the city.

Higher rentals

Another contributor to this trend are the high rents in cites.

“The young crowd mostly wants to live in an area which offers a good social life for them. However, the rentals in these areas are higher. For example, say the rent for a 2BHK in HSR Layout is around ₹40,000 per month. This can be paid as EMI if the homebuyer opts for a ready-to-move home and consequently enjoys capital appreciation over time,” pointed out Mr. Narahari.

Will slowdown have an impact?

Property developers believe that the economic slowdown, which has hit several sectors, may not have as adverse an impact on this trend. Mr. Purvankara said that a series of structural reforms a few years ago - such as RERA Act and GST - had helped convince the “fence sitters” to go ahead with their decision to purchase homes.

Other developers shared a similar opinion. “One also has to understand that home buying is maybe one of the biggest financial decisions in an individual’s life-time. Hence, the gestation period would be a tad longer and the buying decision is not impacted immediately by external factors. The end–user markets like Bengaluru and Hyderabad have been more or less stable,” said Mr. Purvankara.

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Printable version | Feb 24, 2020 11:08:58 AM |

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