Why does Gen Z in India prefer renting over buying homes?

Mumbai: A recent report by Knight Frank reveals significant differences in housing preferences across generations in India, with Baby Boomers, Gen X, and Millennials largely opting for homeownership, while Gen Z shows a distinct preference for renting.

Generational preferences: Ownership vs renting

According to the report, around 79 percent of Baby Boomers, 80 percent of Gen X, and 82 percent of Millennials favor owning a home. In contrast, only 71 percent of Gen Z respondents express a desire to own property, while a notable 27 percent lean towards renting, showcasing a generational shift in housing preferences.

Reasons for Buying

While Baby Boomers view home buying mainly as an investment (29 percent) or a plan for retirement (15 percent), Millennials and Gen Z are driven by the desire for better living spaces.

Roughly 39 percent of Millennials and 36 percent of Gen Z are upgrading their current homes or purchasing a new home for personal use. Across all generations, 37 percent of respondents are upgrading to better homes, indicating an increasing interest in mid-range and luxury housing across India’s Tier 1 cities.

Home yypes and financing preferences

When it comes to property types, apartments are the top choice, with 52 percent of respondents opting for them, followed by studio apartments (19 percent) and independent houses or villas (17 percent).

Financing remains crucial, as 79 percent of respondents rely on home loans to buy property, showing a sustained reliance on financing options across generations.

 A strong preference for ownership

Overall, 80 percent of the respondents prioritize homeownership, with only 19 percent preferring to rent and a mere 1 percent undecided.

Knight Frank Chairman and Managing Director, Shishir Baijal, emphasized that India's real estate landscape remains robust, aligning with the country’s broader economic and development goals.

Key decision factors

Location is a critical factor, with 50 percent of respondents citing it as their top consideration when purchasing a property. Additionally, a builder's reputation (35 percent) and proximity to the workplace (33 percent) play significant roles in decision-making, underscoring the importance of trust and convenience in enhancing buyer confidence in long-term investments.

IANS