Written by Dhiren Tharwani, Director, Tharwani Realty
India’s real estate market in urban areas is undergoing a quiet but significant change. Once skewed towards rental, the young are now increasingly entering the world of homeownership. From large to small cities, young Indians are rewriting their perception of wealth, investments, and living standards through real estate. Here’s a glimpse into what’s driving this transformation and what it implies for the future of urban living in India.
A combination of increasing rental rates, the trendification of work-from-home scenarios, and affordable availability of home loans is leading young Indians to rethink their residence. Rents have accelerated sharply in urban hubs such as Mumbai, Bengaluru, and Pune. Most young professionals now understand that a home loan EMI cost is not significantly higher than paying rent—with the only difference lying in property ownership. Remote work opportunities and job flexibility are also leading them to seek affordable housing in upcoming zones, such as tier 2 and tier 3 cities.
Financial freedom is becoming an increasingly important priority for Millennials and Gen Z. They are eager to create long-term wealth, and real estate seems like a more secure option than other investments. Developers of real estate are changing too—providing simpler payment terms and bringing technology into the home-buying process to make it more convenient.
For today’s young consumers, luxury is no longer just about price. It is about value, lifestyle, and exclusive experiences. Rather than traditional big homes with extravagant interiors, they opt for thoughtfully designed homes in top locations that align with their contemporary lifestyles. Spaces like co-working spaces, gyms, rooftop greenspaces, smart home systems, and green building methods are in greater demand.
There’s also increasing demand for branded residences and gated communities that provide security, sophistication, and prestige. One trend is that even young people in their late 20s are opting to spend more money on homes that can provide comfort and convenience and refuse to wait until middle age to upgrade. Their focus is on starting strong and living well right from the outset.
Affordability is a continued concern, particularly for the first-time buyer. Although interest rates have risen modestly, they remain at tolerable levels, and young adults are still considering buying homes. Builders are reacting by introducing small 1 and 2 BHK apartments tailored specifically to the average salaried urban working professional.
Government initiatives for first-time homebuyers and lower stamp duties in certain states are also helping to make homeownership within reach. Websites that provide homebuyers with the facility to compare loans, check credit scores, and calculate EMIs are breaking the fear barrier about the financials of home buying and helping to raise transparency. Better financial literacy is enabling young people to make intelligent and informed decisions, avoiding the vicious circle of rental existence.
But rentals and co-living space have their place—their just changing. Once highly coveted by only students or new graduates, today’s co-living focuses on community, ease, and flexibility. Contemporary co-living properties now include private rooms, fast internet, shared spaces such as kitchens and gyms, and even social activities.
For those who are not ready or in place to buy, these upgraded rental options offer the comfort of convenient living with on-site amenities and short leasing durations, often as short as three months. Some developers are also piloting rent-to-own products, where part of the rent goes toward eventual ownership, marrying flexibility with investment potential.
Another significant change is mindset—having a single, lifetime home is being supplanted by creating a real estate portfolio. Young investors are now buying into properties in other cities, not necessarily for residence, but as producing or resale assets. Fractional ownership platforms are also becoming popular, allowing individuals to invest in holiday or commercial properties with relatively modest capital.
Sustainability is a major issue of concern. Environment-friendly homes, energy-efficient buildings, and being close to nature are in high demand. Most people prefer suburban or peri-urban areas that provide a mix of greenery and easy access to the city.
Technology takes center stage in this process. Virtual tours to AI-driven home recommendations, digital tools are being used at each step by young buyers. They’re following real estate influencers, soliciting feedback from social media, and relying on recommendations from peers. For them, homebuying is not a monetary move—it’s an experience-based choice based on values and information.
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