By Akash Pharande, Managing Director – Pharande Spaces
For real estate developers and their marketing teams today, things have changed a lot from 30 years ago. In India, first-time homebuyers are no longer people in their late 40s or early 50s who have saved up to fulfill their dream of buying a home. Today’s first-time homebuyers are essentially millennials. In a relatively young country like India, they are now the most extensive customer segment for real estate developers.
What defines millennial homebuyers? Unlike the older generation who worked and saved all their life to finally fulfill their aspiration of homeownership, millennial homebuyers have six significant differentiators.
1. A Youthful Outlook
Above everything else, millennial homebuyers are young. This means that they come to the market with young people’s aspirations. When they buy homes, they do not care so much about the things that mattered more to their parents, such as appreciation trends and returns on investment. Of course, they expect their homes to gain value over time (who doesn’t?), but for ROI, they rely more on the stock market and often also on crypto currencies.
Instead, they want to own homes that help them explore their youthful zest for life experiences. Sure, proximity to the local kirana shop does matter – but so does having a lively cafe, a resto-bar that plays trendy music, and an overall youthful profile in the neighbourhood. Their interpretation of convenience also goes far beyond that of their parents. They are tech-savvy and expect to live in homes where technology plays a big role in the overall livability quotient.
2. Educated Research Vs. Educated Guesses
While their parents relied heavily on word-of-mouth recommendations from their family and friends, millennials instead put their superior education to good use. Many have degrees based on education far superior to the previous generation’s. Back then, college degrees did not equip graduates to approach the homebuying process from a researcher’s perspective.
Degrees in engineering, medical science, and even commerce are now heavily based on digital technologies. This is the age of the Internet and social media. The information highway is massive and very accessible to those who know how to traverse it. Millennials do.
Millennials do not buy homes based on flashy marketing, hype, and glib assurances. They do thorough homework, using their DigiTech skills to go beyond websites to extract information and feedback from consumer forums and social media platforms. Very few millennials arrive at a project site utterly clueless about the developer, his track record, the pros and cons of the project and location, and the average selling prices in the area.
3. In No Hurry To ‘Settle Down’
This is something most developers still don’t seem to understand – trying to market a project by appealing to a millennial’s yearnings for a settled, married life is, more often than not, a fruitless undertaking. Millennials do not marry early in life, and quite a few don’t have any such plans at all. The perception of relationships has changed tremendously in the last two to three decades.
Therefore, a hoarding that depicts how happy the project will make a young couple with kids may be missing the mark 70% of the time. That hoarding space should instead highlight how digitally efficient these homes are, how close the project is to trendy leisure and entertainment establishments, and how the in-house facility management will take excellent care of the house while the owners are travelling.
4. The Sustainability Imperative
When watching the latest outraged documentary about the plight of Planet Earth, we rarely see older people wielding the microphone. Almost without exception, today’s environmental activists are young people – in some notable cases, barely out of school. Today’s younger generations are keenly aware of how the previous ones allowed the environment to be exploited for short-term gains.
15-20 years ago, green homes were little more than a fad in India – a diverting indulgence for the idle rich, at best. Millennials are looped into what is happening on the planet, are personally concerned about it, and want energy-efficient homes in projects developed in an environmentally responsible manner.
They will prefer projects supported by solar energy, do not create needless heat islands, have sufficient greenery, and reduce the need for wasteful electrical appliances. They want to know where the wastewater goes and whether garbage is being segregated.
5. Size Matters – Flashiness Doesn’t
Location still matters, but only from a price arbitrage angle. Millennials want larger homes than the centrally-located pigeon coops that satisfied their elders. They will happily forego vanity zip codes in favour of the more sedate suburbs if they can buy a flat that supports privacy, leisure, and working from home.
They are also less driven by other ‘first impression’ imperatives such as glitzy foyers and pseudo-spectacular architectural sweeps. The day’s aesthetic is efficiency, defined by clean lines and the best possible use of space.
Unlike the earlier generations, millennials approach purchasing homes from the perspective of people who will not be spending the majority of their time there. Inspiring awe in those who visit them at home is not one of their priorities. They want to travel a lot and to socialize with their crowd in youthful, happening places when they’re not traveling. Today’s modern townships create such spaces within the townships themselves.
6. Health-centric Living
A residential project that doesn’t offer a jogging track, tennis court, and gymnasium has already missed the millennial bus by a wide margin. Young people today aren’t just concerned about their planet and each other – they are also heavily invested in their own wellbeing. Green open spaces aren’t mere aesthetics to young homebuyers but represent lung space and prove that the developer hasn’t sacrificed health and wellbeing on the altar of profit.
Considering all these defining aspects of India’s millennial homebuyer demographic today, it is clear that a considerable number of older housing projects are of no interest to them. Millennials may rent homes in such projects, either because of budget constraints or because the locations around their workplaces do not have any projects that attract them.
But when they decide to ditch the rental hamster wheel and set out to buy homes, developers face a completely different breed of customers today than they did a couple of decades ago.