How has COVID attracted millenials to invest in real estate?

While the pandemic has also impacted the real estate sector  like others – with many homebuyers postponing their purchase decisions, it is the millennial segment that is now looking for homes to buy rather than renting them. Owning a home has always been a key part of investment strategy, and under new normal norms, buyers are seeing a value proposition in terms of investing in real estate. With notable changes in the stock markets and its continued volatility, it is not surprising that real estate has become the investment asset class of choice. For one, homes offer capital appreciation, along with the option of rental income – which works for the home buyer/investor in the short term as also long-term scenarios.

Own instead of rent

The pandemic has jostled people indoors and apartment dwellers are confronted with unfavourable situations. With deprived access to green spaces and high density within units, people, especially millennials, are looking at investing in a home of their own.  A recent survey unveiled that of the total buyers looking at purchasing a home, 55% are aged between 25 and 35 years and 68% are end-users. In the second edition of this survey, only 42% were in this age bracket. The general home buying sentiment is also propelled by very affordable home loan rates, which are today between the range of 7.15% to 7.8% .

Historic home loan rates

Home loan rates are at historic lows, the calibrated restart to the Indian economy sees a flurry of enquiries from the potential domestic as well as NRI home buyers. Benefits of tax savings on repayment of home loans add to the deal being too good to resist. Falling interest rates attract less interest earned on bank fixed deposits in comparison to the rental yields earned in real estate investment and additionally enjoy the benefits of capital appreciation.

Returning NRIS and WFH part of new normal

Real estate will be optimistic for both end-users and investors in the post pandemic world. Millenials living in rental homes have realized the importance of being in their own homes while NRIs facing challenging times in their present domiciles are looking at creating a haven ‘back home’ in India. The need for extra or additional space for home offices is on the rise, with the need for more well planned layouts. The significance  of common amenities, business centres, and more open spaces will be an inherent part of the new demand criteria in the post-COVID-19 world.

In conclusion, the pandemic has come as a rude shock to the economy and real estate is witnessing tremendous change in consumer behaviour. Owning a house is now seen as a priority in context of safe and secure investment. This will steer intensified demand for homes, as the economy sees a calibrated restart.