Bengaluru's Real Estate Market: A Surge in Homeownership Among Gen Z and Millennials
The Shift from Renting to Owning
Bengaluru, once renowned for its vibrant rental market, is witnessing a significant transformation. Gen Z and millennials increasingly opt to buy homes instead of renting, driven primarily by soaring rental prices. This shift has led to a notable decrease in the average age of first-time homebuyers, from 42 to 34 in just three years.
A Decade of Change
A decade ago, tenants in major Indian cities like Bengaluru, Mumbai, Pune, Chennai, Hyderabad, and Delhi-NCR typically moved around nine times before purchasing a home. However, the trend has reversed. Today's younger generations are more likely to buy after renting only four to five times.
Case Studies: Abhishek Sinha and Akshay Punjabi
Abhishek Sinha, a 32-year-old employee in a medical startup, recently purchased a home in Bengaluru's Whitefield after renting three different apartments. Similarly, Akshay Punjabi, a retail e-commerce employee, invested over Rs 1 crore in a prime residential project in Whitefield by the time he turned 32. Both individuals cited the high rental yields in Bengaluru and the stability of homeownership as key factors in their decisions.
NoBroker Data: Gen Z and Millennials Dominate Market
In the first half of 2024, millennials and Gen Z accounted for over 60 percent of property purchases on NoBroker's platform in Bengaluru. This trend is indicative of a growing preference for homeownership among younger generations.
Rising Rents and Income Levels
The surge in homeownership can be attributed to several factors. Prime areas in Bengaluru have seen rent prices increase by 45-50 percent over the past three years. This rise, coupled with increasing income levels, has made homeownership more attractive to younger buyers.
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Salaries and Per-Capita Income
Salaries in Bengaluru have seen a significant uptick post-pandemic, and the state's per-capita income has grown by 5.8 percent between 2022 and 2023. This economic growth has fueled housing demand among millennials and Gen Z.
Lucrative Rental Yields
Attractive rental yields have also played a role in attracting young homebuyers. In Bengaluru's eastern IT corridor of Whitefield, rental returns have climbed to 4-5 percent. This has made investing in properties for rental income a lucrative proposition.
Property Preferences
The majority of young buyers in Bengaluru prefer ready-to-move-in properties or are willing to wait for new inventory less than six months old. For those seeking rental income, 1BHK units under Rs 1 crore are a popular choice. For end-users, properties priced between Rs 1 crore and Rs 1.5 crore in prime areas like Indiranagar, Koramangala, and Whitefield are particularly desirable.
Conclusion
The Bengaluru real estate market is experiencing a significant shift as Gen Z and millennials increasingly choose homeownership over renting. Rising rental prices, increasing income levels, and attractive rental yields have all contributed to this trend. As the city continues to grow and develop, the demand for residential properties will likely remain strong.
Zoltan Properties offers a range of luxury and affordable homes in prime Bengaluru locations like Whitefield and Indiranagar. Whether you're a homebuyer seeking a comfortable living space or an investor looking for a profitable property, Zoltan has options to suit your needs.