Urban Indian Home Buyers Prefer Apartments and Homeownership: Insights from Knight Frank
Knight Frank's recent survey, 'Banking on Bricks,' highlights a strong preference for apartments and homeownership among urban Indian buyers, with significant generational differences in real estate trends.
Real EstateHomeownershipApartmentsKnight FrankIndian Urban Home BuyersReal Estate MumbaiNov 07, 2024
Homeownership is a significant aspiration for the majority, with 80% of respondents preferring to own a home. This preference is consistent across different generations, including 79% of Baby Boomers, 80% of Gen X, and 82% of Millennials. However, Gen Z shows a higher inclination towards renting, with 27% of this generation preferring this option.
The reasons for purchasing a home vary among different age groups. Millennials and Gen Z are leading the trend in upgrading and purchasing for end-use, with 39% and 36% respectively. Baby Boomers, on the other hand, show a stronger interest in investments (29%) and retirement plans (15%).
Overall, 37% of respondents are upgrading to better homes, reflecting a shift towards mid-range and luxury housing, especially in Tier 1 cities. Additionally, 32% are first-time homebuyers looking for end-use, 25% are investing, and 7% have other reasons such as retirement or acquiring a second home.
Shishir Baijal, Chairman & Managing Director of Knight Frank India, commented, “India's real estate sector is a crucial driver of economic growth, contributing significantly to GDP and employment. It also mirrors evolving buyer preferences and financial support systems. Our survey highlights a strong preference for homeownership, with 80% of respondents aspiring to own homes. We are witnessing a growing trend towards premium properties, particularly in urban areas. As the BFSI sector continues to support this growth by offering home loans, investment avenues, and risk management tools, combined with technological and infrastructure advancements, we foresee a resilient real estate landscape that aligns with India's broader development goals.”
Location remains a top priority for 50% of respondents, highlighting its importance in real estate decisions. Property size and layout (45%), along with price and affordability (45%), are also significant factors. Homebuyers are seeking value for their money while meeting their lifestyle needs. The builder’s reputation (35%) and proximity to the workplace (33%) also play crucial roles, emphasizing the demand for reliability and convenience. Amenities are becoming increasingly important, with 32% of buyers looking for integrated facilities such as gyms, parks, and co-working spaces.
Home loans are the preferred mode of financing across all income groups, with 79% of respondents relying on them. Among affluent homebuyers, 83% of households earning between Rs 1 million to Rs 5 million prefer home loans. In contrast, wealthier individuals with household incomes above Rs 5 million show a higher inclination (19%) to use personal savings or liquidate investments, compared to 11% in the lower income group.
Homebuyers have specific expectations from banks and financial institutions during the homebuying process, including competitive interest rates (74%), flexible loan tenures (48%), and a quick loan approval process (38%). Guidance on legal and documentation aspects is important for 25% of respondents, and 15% value home insurance options.
Knight Frank India is a leading real estate consultancy firm, providing comprehensive services in property management, valuation, and market research. Their insights and surveys offer valuable data for stakeholders in the real estate sector to make informed decisions and align with market trends.
Frequently Asked Questions
What was the main focus of Knight Frank's 'Banking on Bricks' survey?
The main focus of Knight Frank's 'Banking on Bricks' survey was to understand the preferences and trends of urban homebuyers in India, including their preferred property types and reasons for purchasing homes.
What percentage of respondents in the survey prefer to own a home?
80% of the respondents in the survey prefer to own a home.
Which generation shows the highest preference for renting?
Gen Z shows the highest preference for renting, with 27% of this generation preferring this option.
What are the top three priorities for homebuyers according to the survey?
The top three priorities for homebuyers are location (50%), property size and layout (45%), and price and affordability (45%).
What is the preferred mode of financing for homebuyers across all income groups?
Home loans are the preferred mode of financing for homebuyers across all income groups, with 79% of respondents relying on this option.
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