Why Gen Z homebuyers prefer to buy property rather than live with their parents

In the 2023 survey, the consultant found that Gen Z displayed a significant shift in attitude when deciding to move to a new home.

A few weeks back, Sunil Sharma, a 29-year-old techie in Bengaluru, was looking for a 2BHK apartment in the startup hub of HSR Layout.

"Being a salaried person, I can afford an EMI of Rs 60,000 per month. Additionally, my parents have already told me that they will support me with the down payment," he added.

Gen Z will lead property buyers in the next two years in India, compared to 29 percent of baby boomers, according to a February study by real-estate consultancy CBRE.

While Gen Z refers to the population born between 1996 and 2010, baby boomers are those born between 1946 and 1964. Millennials are those born between 1981 and 1996.

Brokers in Bengaluru say while queries from younger homebuyers have almost doubled, compared to last year, people aged below 30 have also started investing in real estate.

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Soaring rentals

Rents in the Information Technology (IT) capital of India have shot up by as much as 40 percent in some areas since the last six to eight months, putting sizable apartments in tony neighbourhoods out of the reach of most white-collar workers.

As normality resumed after the third wave of the pandemic and office occupancy returned to normal, an upward correction in rentals is bound to happen, experts say.

"Monthly rents are almost touching home loan EMIs in prime locations of Bengaluru,” Avinash Bhatt, a communication specialist, told Moneycontrol.

Appreciating capital values

Bhatt said even if he decides to leave Bengaluru for a job, he will certainly buy an apartment for investment purposes.

Kiran Kumar from Hannu Reddy Realty said, "Most of the queries coming from the younger homebuyers are for having their own assets. A significant percentage of them are willing to own an apartment for investments."

Local brokers say in prime areas like Indiranagar, Koramangala, HSR Layout and Sarjapura, Rs 1 crore apartments has appreciated to Rs 1.2-1.3 crore in one year.

"Even areas away from the city centre, like Bellandur in the north and Whitefield in the east, the appreciation is close to 20 percent," Sunil Singh from Realty Corp added.

In general, real estate capital values in the city have appreciated 10-15 percent over the last year.

More focus on premium apartments

In the 2016 edition of the survey, CBRE found that affordability was one of the major factors why millennials chose to stay with parents that time.

In the 2023 survey, the consultant found that Gen Z displayed a significant shift in attitude when deciding to move to a new home.

In the previous two years, the top priority for millennials was affordability to move to new homes. However, the new survey indicates that those planning to move in the next two years would be willing to pay a premium for better-quality properties and surroundings.

Staying independently

With the several changes that the pandemic has brought upon the Indian real- estate sector, Bhavesh Kothari, Founder & CEO of Property First, said younger generations today are more likely to retain the ownership of properties they want to invest in.

For Sananda Ghosh, a marketeer in Bengaluru, living alone has made her more independent. "Today, it will be difficult for me to go back and stay with my joint family, especially with the lifestyle I have got accustomed to over the years," she added.

And as the younger generation forays out of their homes in search of better jobs and higher education, it is more likely they will stay alone, either in a rented house or in their own apartments.