Are millennials purchasing properties or are they preferring to stay on rent, especially co-live in apartment blocks close to their workplace or continue to live with their parents?
Several international property consultants have said that in 2020 as many as 65 percent of the global population will be under the age of 35 and would make up half of the global workforce.
A CBRE report has revealed that one-third or 35 percent of the millennial respondents identify 'investment' as the key driver for buying a property. Overall, a majority of millennials aim to buy a home, and while placing the utmost importance on quality of life, they also refuse to compromise on the quality, size and location.
There is also a category of high networth millennials, second generation business families or startup honchos who have made mega bucks from their startups or divesting their stake at high valuations. They too have started investing in second homes spread across the country in Goa, Alibaug or even outside India in countries such as Italy, Thailand, Sri Lanka, United Kingdom and even New York.
The price of properties generally range from Rs 4 crore to all the way up to Rs 50 crore and more.
"There are around 3 million millennials today and demand for second homes among them is growing by 10 to 15 percent across cities. Overall, there has been a 30 percent increase in the number of sales across the holiday home segment. Majority of them are from HNI families and they are buying second home properties across India and abroad with accessibility being the main factor," said Amit Goyal, CEO at India Sotheby's International Realty.
There is also a sizeable population who have made their money through start-ups and some of them who have been divesting their stake at high valuation.
Italy, Thailand and Sri Lanka are easily accessible destinations and perhaps the most popular among this segment scouting for second home properties. In Italy, these are available for anything between Rs 10 crore to 18 crore. In Thailand, these cost Rs 4 crore to Rs 6 crore in areas such as Phuket and Kho Samui and properties in Sri Lanka's Bentota, Balpatiya and Galle cost anything between Rs 5 crore to Rs 8 crore.
Within India, these second generation business promoters, generally look for second homes in Goa, Alibag, Kasauli and even Rishikesh.
The price range of properties in Goa is between Rs 5 crore and Rs 12 crore. In Alibag, these range from Rs 10 crore to Rs 15 crore. In Kasauli and Rishikesh, these are available for Rs 4 crore to Rs 6 crore but these are mostly villas. Millennials prefer new developments, he says.
Most of these high-networth buyers have been educated overseas and are now back in the country to look after their family businesses. This segment therefore, may also be interested in buying into second homes in New York and London. Apartments in New York cost Rs 12 crore onwards and a 2 BHK in London anything around Rs 8 to Rs 9 crore.
"When I was looking for a second home - the purpose was more experiential than actually owning a property. I decided to invest in a second home abroad due to play on currency fluctuations, capital appreciation, great rental yield and to diversify," said a buyer who has invested in a property in London.
These buyers are also open to putting their houses on rent for most part of the year. Rentals in these markets has not appreciated much except perhaps in Canada. In UK, the rental yield is anything between 2.5 percent to 4 percent; in Canada it is anything between 4 percent to 5 percent, in Dubai it is 6 percent to 7 percent and in Singapore it is 3 percent to 4 percent, says Goyal.
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