With an average age of 29 years, India is not only the most populated country in the world but also among the youngest population. If we look at the data, in recent years, we can see that millennials are among the driving force in the real estate market and have been reshaping trends and defying stereotypes.

As far as the housing market is concerned, millennials have entered it much earlier than previous generations. This is further strengthened by Magicbrick's latest report which indicates that millennials i.e. people who at present are between the ages of (27- 40) comprised 53% of the total demand for home loans in India.

The year 2023 marks a significant juncture as an increasing number of millennials are actively seeking to invest in their own homes. This shift in attitude towards homeownership among millennials is influenced by several key factors reshaping the housing landscape.

Let us take a look at the reasons why millennials are buying a home in 2023 more than ever before.

Financial Stability and Favorable Mortgage Rates

One of the primary reasons behind this surge in millennial homebuyers is the attainment of greater financial stability. As per a report by Deloitte, financial concerns seem less present in India compared to the global average, with over two-thirds of Gen Zs and around 8 in 10 millennials feeling confident that they'll be able to retire comfortably and pay all their monthly expenses.

This sense of stability is largely because a large proportion of Indian Gen Zs and millennials have a paying job in addition to their primary job. The top side jobs held in India are social media influencers, working for a non-profit, and selling products or services online.

As this generation advances in their careers and solidifies their financial standing, the idea of owning a home has become more attainable and appealing.

Furthermore, historically low mortgage rates in many regions have made buying a home more financially feasible than in previous years. This week the Reserve Bank of India kept the policy rate unchanged at 6.50 percent, making it the fifth consecutive time this year. This has further boosted the positive outlook for homebuyers and the consistent stance is making the idea of owning a home more favourable in 2023.

The positive mood is not just seen in millennials but in all age groups, reflected by the excellent housing registration numbers seen in Mumbai. An assessment by Knight Frank India indicated Mumbai's real estate sales and registrations recorded their best November in 11 years. The report said the city of dreams saw 1 lakh property registrations in just 10 months of 2023.

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Desire for Stability and Long-Term Investment

COVID-19 may no longer be a day-to-day concern, however, the repercussions of the pandemic have made everyone rethink their priorities. Much more for the millennials as operating in a high-inflation economy, millennials are always on the lookout for a good deal and stability. Stability is a significant driving force behind the millennial interest in homeownership.

Therefore 2023 is the perfect time for millennials to take advantage of low-interest rates on mortgages and invest in a permanent roof over their heads. The concept of investing in a home, rather than continuously paying rent, has become an attractive prospect for securing their financial future and building equity.

But homeownership for residence is not the only thing millennials are looking for, many are buying it as a long-term investment. With rent increasing in most major cities and people all over the country moving to tier I cities like Mumbai, Bangalore, Hyderabad, and Delhi, the potential of earning rental income has risen considerably. In 2023,

As per an Anarock Report, among the top metro cities in the country, Bengaluru has the highest rental yield at 4.35%, followed by Mumbai at 4.0%. The rental yield in Bengaluru was 3.6% in 2019, the highest since Covid.

Remote Work Flexibility and Changing Preferences

The advent of remote work has revolutionized the way millennials perceive homeownership. With the ability to work from anywhere, many are opting to move to locations that offer lower living costs, better quality of life, or align more closely with their lifestyle preferences.

According to a study done by Joblist, it was found that about half -49 percent of millennials surveyed want to work fully remotely, whereas only 27% ; of Generation Z (Gen Zers) feel the same way; they're much more likely than average "to be seeking in-person" work opportunities. In contrast, Gen X and baby boomers were less enthusiastic about remote work. Only 40% of either group indicated that "their ideal workplace setting" should be remote.

This shift in work dynamics has empowered millennials to choose locations based on personal preferences rather than just job proximity. Apart from location, this has also given birth to the need for larger homes. A 2 BHK is no longer seen as sufficient for a millennial couple, as the need for a dedicated workspace at home has become a more common ask since the pandemic.

Additional Tax Benefits in 2023

Buying your own home not only earns you social status and respect; but homeownership also comes with additional tax benefits. These tax benefits under the regulations of the Income Tax 1961 are further made stronger by the government in this year's budget.

Union Finance Minister Nirmala Sitharaman in the budget speech extended The deadline for claiming additional deductions for house loan interest payments to 31 March 2024

This comes after the administration extended the deadline to 31 March 2022, in the previous budget. All house loans approved to that date will be subject to the extension on home loans through 31 March 2024.

This move has contributed to millennials reaching out to their banks and bagging that home loan, taking us back to the first part of the article where we talked about Magic Brick's survey which showed millennials comprised 53 percent of the total demand for home loans in India.

The rise in millennials buying a home in 2023 is indicative of a generation reaching new milestones and making strategic financial decisions. Apart from the personal aspects that revolve around home buying, experts believe with a stabilized repo rate, rising disposable income and huge tax benefits; real estate will remain an attractive investment asset for millennials and that the surge in demand is expected to remain going forward.

As the youth of India navigate life's milestones and seek stability, they are redefining not just their lives but also the housing market by embracing the advantages that come with owning a home. This changing shift not only shapes their lives but also shapes the ever-evolving landscape of the real estate market for years to come.