Millennials and Gen Z Will Drive 60% of India’s Homebuying Market by 2030: JLL Report

India’s residential real estate sector is witnessing a dramatic transformation, with Millennials and Gen Z emerging as the dominant force in home buying. A recent report from real estate consultant JLL India projects that these two generations will account for approximately 60% of all new homebuyers by 2030. This shift signals a significant change in the dynamics of the housing market, driven by rapid urbanization, evolving consumer preferences, and technological innovations. The report highlights several factors that are set to shape the future of the housing sector in India, with Millennials and Gen Z playing a central role.

Millennials and Gen Z: The New Face of Homebuyers

Millennials, born between the early 1980s and mid-1990s to early 2000s, and Gen Z, born between the mid-1990s and early 2010s, are the demographic groups set to dominate India’s housing market in the coming years. By 2030, these two generations are expected to constitute 60% of all new homebuyers. This shift reflects broader changes in Indian society, with younger generations increasingly prioritizing homeownership as a symbol of financial success and stability.

Several factors are driving this surge in demand for housing among Millennials and Gen Z:

Economic Growth and Increasing Affluence: As India’s economy continues to grow, a large proportion of Millennials and Gen Z are moving into higher-income brackets, giving them the financial means to invest in homes. Many of these younger buyers are professionals working in high-paying jobs, particularly in the IT, finance, and tech sectors, which are driving demand for premium and luxury housing.

Changing Lifestyle Preferences: Younger homebuyers are seeking more than just a place to live. They are looking for homes that align with their modern lifestyles, characterized by technological integration, sustainability, and connectivity. Smart homes, with features like energy-efficient systems and home automation, are becoming highly desirable.

Increased Urbanization: India’s urban population is expanding rapidly, and Millennials and Gen Z are the key drivers of this urbanization. These younger generations are more likely to move to urban centers for work and education, contributing to the growth in demand for residential properties in cities and towns.

Technology and Sustainability: Shaping Homebuyers’ Preferences

The rise of technology and the increasing focus on sustainability are two key trends influencing the housing market. Younger buyers are highly tech-savvy and expect their homes to be equipped with the latest innovations. The demand for smart homes—residential units equipped with home automation systems, energy-efficient appliances, and integrated security features—is growing rapidly. These tech-integrated living spaces appeal to the younger demographic's desire for convenience, security, and sustainability.

Additionally, sustainability has become an essential consideration for today’s homebuyers. What was once seen as a luxury is now a necessity. According to the JLL report, Green-certified buildings: These are expected to account for 30% of new residential projects by 2025, doubling from just 15% in 2020.

Millennials and Gen Z are particularly concerned about the environmental impact of their choices and are more inclined to invest in homes that are energy-efficient, water-conserving, and eco-friendly. Green building certifications like LEED (Leadership in Energy and Environmental Design) are becoming increasingly common as more developers adopt sustainable construction practices.

Strong Growth in Housing Sales and Sector Outlook

The Indian housing market has been experiencing robust growth, particularly in 2024. The report highlights that:

• The number of residential units sold in 2024 has reached approximately 85% of the total units sold in 2023, reflecting strong demand for residential properties.
• Sales in 2024 have increased by 17% compared to the previous year, signaling a healthy recovery in the sector.
• Housing sales have remained healthy, with a new peak in the nine-month period from January to September 2024, where close to 230,000 homes worth INR 380,000 crore were sold across the top seven cities, translating to 363.2 million sq. ft of space sold.

This growth trajectory is expected to continue, with the residential housing market projected to contribute 13% to India’s GDP by 2025. The market is also set to grow into a USD 1 trillion industry by 2030, supported by demographic shifts, urbanization, and government policies aimed at promoting affordable housing. The affordable housing segment remains a key focus, as the Indian government continues to push for more affordable and accessible housing options for lower-income and middle-class buyers.

Emerging Growth in Tier II and III Cities

Tier II and III cities are emerging as important growth hubs in India’s housing market. Cities like Jaipur, Indore, and Kochi are expected to account for more than 40% of new housing developments by 2025. These smaller urban centers are becoming increasingly attractive to younger buyers due to:

• Lower property prices
• Improved infrastructure
• Greater access to amenities

Market Performance in 2024 and Beyond

2024 is expected to end as the best year ever in terms of the sector’s performance across the top seven cities. Over 300,000 homes worth INR 510,000 crore across 485 million sq. ft are expected to be sold by the end of the year. With capital values surging and being at an all-time high, the report states that INR 380,000 crore worth of homes have already been sold in the first nine months of 2024. This has raised the average sale value of an apartment to INR 1.64 crore, primarily driven by the robust sales of premium housing projects, particularly in Delhi NCR.

Future of India’s Housing Market

India’s housing market is poised for a remarkable transformation in the coming years. With Millennials and Gen Z set to dominate the homebuying landscape, the demand for sustainable, tech-integrated, and affordable housing will continue to rise. The sector is evolving in response to changing consumer preferences, urbanization, and technological advancements, positioning itself for long-term growth.

As the housing market in India grows, it is clear that these younger generations will play a central role in shaping its future. Developers and investors who can adapt to these changing demands by offering smart, sustainable, and affordable homes will be best positioned to succeed in this dynamic market. The transformation of India’s housing sector not only reflects the aspirations of a younger, more affluent population but also signals the potential for sustained growth and innovation in the years to come.