Millennials vs Gen Z Home Buying: The dream of buying a house has become old; 46% youth are now choosing ‘rental house’ instead of heavy EMI, a big revelation in NoBroker’s report

In India, having one’s own home has always been considered the biggest measure of success and social security. The biggest dream of the parents’ generation was to build their own house once in their life. But today’s modern young generation—Millennials and Gen Z professionals—are completely changing this old and traditional thinking. Now the youth are giving more preference to ‘Financial Freedom’ instead of getting trapped in the mental and financial burden of paying huge home loan installments (EMIs) for 20-30 years. According to the latest data released by the famous property tech platform NoBroker, 46 percent of the tenants in the country now consider living in a rented house for a long time as their best and wisest option. This changing trend includes 53 percent professionals aged between 25 to 34 years and 48 percent professionals aged between 35 to 44 years, who clearly say that they will continue to live in a rented house instead of buying a house in the future. House rent is being halved due to huge EMIs: Understand the mathematics. The main reason behind this big U-turn of the youth is the skyrocketing house prices in the metros and their unbearable financial burden. Home loan installments in major tech and commercial cities of the country have become more than double the actual rents there. Jump in EMI-to-rent ratio: In the last five years, this ratio has increased from 1.86 to 2.68 in Gurugram, Delhi-NCR. Same is the condition of tech hub Bengaluru (2.38), Hyderabad (2.47) and the country’s financial capital Mumbai (2.19). Simple example: What this means in simple words is that if you are living on rent for ₹50,000 per month in a posh area, then to buy the same house, you will have to pay a monthly EMI of more than ₹1 lakh every month apart from the down payment. Smart Investment: Instead of investing all their savings in a lump sum down payment and paying huge EMIs, today’s youth is investing that huge amount in the stock market and mutual funds. According to a 31-year-old software professional from Bengaluru, it is better to invest the money rather than gamble with EMIs of ₹1 lakh every month for 20 years, so that one can have complete freedom to change cities whenever one wants as per one’s career. No compromise with lifestyle and luxury. For today’s young generation, living on rent has not become a helplessness or compulsion, but a very thoughtful and conscious financial decision. They are not living on rent just because they do not have money, but they want to make their lifestyle better (Premium Lifestyle) with that money. Demand for premium and bigger homes: Nowadays professionals prefer to live in premium residential projects with amenities like big homes, modern gated societies, fully furnished apartments and club houses. Situation in Bengaluru and Mumbai: Despite high rents in Bengaluru, the demand for 3-BHK flats remains more than the supply. At the same time, almost one-third (33%) of the total rental demand in Mumbai Metropolitan Region (MMR) is from luxury homes whose monthly rent is more than ₹40,000. In the words of a marketing professional from Mumbai, owning a home may be a goal, but for this they do not want to compromise with their current financial freedom and comforts. Changing career graph and surge in rental market City/Metropolitan Region Record increase in annual rent (Annual Rent Growth) Mumbai (MMR) 11% (highest jump in the country) Chennai 8% Bengaluru 7% Hyderabad ~3% Delhi-NCR ~3% Behind this changed mood of the youth is also their rapidly changing career graph. Due to frequent job changes in the corporate world, work from home or hybrid work culture, and increasing awareness about financial planning, professionals do not want to take the risk of buying a permanent property until they are completely settled in their life and career. Due to this attitude of the youth, the rental market in the metropolitan cities of the country is growing at a record fast today and home owners are making money.