Is Renting Dead? Why Millennials and Gen Zs Are Choosing Ownership Earlier

For decades, renting was the default for young professionals in India. But recently, the narrative is shifting. More millennials and Gen Zs in India are abandoning the “wait-and-rent” approach and embracing homeownership earlier. The question arises: is renting dead for the younger generation?

A strong undercurrent driving this shift is millennials buying homes in India at younger ages than their predecessors. Factors such as rising rents, changing aspirations, easier home-loan access, and a stronger desire for stability are nudging young adults towards ownership. According to data, in Bengaluru alone, millennials and Gen Zs accounted for over 60% of property purchases in the first half of 2024. 

Let’s explore how millennials buying homes in India are reshaping the real estate landscape, how Gen Z homebuyers in India are entering the fray, and ultimately what this generational shift means for developers, lenders, and the broader housing market.

Millennials’ Financial Maturity & Aspirations

The wave of millennials buying homes in India marks a shift in financial confidence, life priorities, and risk tolerance. This generation, now in their late 20s through early 40s, is in a sweet spot of career growth and income stability. 

• Rising Income, Job Stability & Dual Incomes

Many millennials today belong to dual-income households, reducing the financial burden on a single earner and increasing combined saving capacity. As economic growth stabilises and employment patterns mature (especially in sectors like IT, fintech, e-commerce), the confidence to commit to long-term assets like property has grown.

• Investment Mindset & Hedging Against Inflation

Unlike previous generations who treated homes primarily as dwellings, millennials increasingly view real estate as a long-term investment and inflation hedge. They look for properties that balance capital appreciation and livability such as mid-segment apartments in growth corridors or up-and-coming suburbs. 

• Lifestyle Aspirations, Wellness & Experience

For millennials, a home must reflect their lifestyle and values. There is a rising demand for wellness zones, co-working pods, landscaped green spaces, smart home automation, and pet-friendly features. Developers are reacting: many new projects promote “experience-led” living, where buyers expect customization, sustainability, and seamless tech integration. 

For a millennial who aims to settle into a community or see their home grow in value, homeownership thus becomes more attractive.

• Debt Comfort & Creative Financing

Millennials have become more adept at managing multiple liabilities. Many are comfortable carrying EMIs for 15–20 years, especially when home loan interest rates are competitive. Developers and financial institutions are also crafting schemes to assist: longer repayment windows, flexible installments, or subsidised interest for early buyers, each smoothing the transition from renter to owner.

These models reduce entry barriers and allow earlier entry into the property market.

Gen Z’s Desire for Security and Investment

While millennials buying homes in India are already reshaping real estate trends, Gen Z homebuyers in India are entering the market even earlier, and with new expectations around security, returns, and flexibility.

• Earlier Entry & Loan Reliance

Recent data suggests that Gen Z is not waiting to hit middle age before investing in a home. According to a survey by Knight Frank, over 36% of Gen Zers in urban India are actively considering homeownership, the highest among all age cohorts. 

In fact, many from Gen Z are buying their first homes 5–6 years earlier than millennials did at the same life stage. This earlier entry into ownership is heavily facilitated by credit. As of October 2023, millennials and Gen Zs together accounted for 53% of India’s home loan applications.

Gen Zs, with lower capital accumulation, often rely more on loans than cash reserves to make home purchases viable.

• Investment, Not Just Shelter

In an Economic Times article, real estate analysts noted that Gen Z is increasingly treating property as a tool for passive income or wealth generation, not merely a place to live. 

This dual mindset of seeking both comfort and return places homeownership ahead of prolonged renting. When rents are rising (often faster than inflation), owning becomes an attractive alternative. 

Of course, Gen Z is still constrained by financial capacity, credit history, and overall affordability. High real estate prices in metro centers remain a barrier. Some Gen Z home aspirants opt to delay buying or prefer suburban and Tier II cities where prices are lower. 

Young Homebuyers Real Estate Trends

As younger buyers tilt toward ownership, two trends stand out: a surge in demand for compact homes and tier-wise city preferences. 

1. Compact & Micro-Homes: Big Appeal in Small Packages

One clear shift is the rising acceptance of smaller homes such as studios, micro-apartments, 1RK/1BHK units, especially among first-time buyers and single professionals. In metro cities where land and construction costs are steep, compact units provide an accessible entry point into property ownership.

Demand for 1RK or studio apartments is rising strongly among IT professionals and students, with prices ranging broadly but still significantly lower per square foot than larger units. Micro-apartments (200–350 sq ft) are gaining traction in metros as affordability and design efficiency meet.

These compact options allow millennials buying homes in India and young homebuyers in real estate to invest earlier, with lower capital outlay and manageable EMIs. Moreover, these smaller homes are easier to maintain, resale, and occupy — making them very practical for younger buyers.

1. Urban vs Tier-II preferences

A striking pattern in millennials buying homes in India and Gen Z homebuyers in India is how preferences split between Tier I metros and Tier II/III cities. Urban cores remain aspirational, but affordability pressures and lifestyle shifts are driving younger buyers to look beyond metros.

In Tier I cities demand from young professionals continues to dominate. These markets attract young homebuyers in real estate because:

• Job opportunities, particularly in IT, finance, and start-ups, cluster here.
• Lifestyle amenities — gyms, malls, cafes, entertainment hubs — are concentrated in metros.
• Connectivity through metros, airports, and highways makes commuting easier.

An ANAROCK report showed that over 55% of millennials preferred owning homes in metro cities, even if it meant choosing smaller apartments.

However, affordability is a growing concern, which is why ownership often means compromising on size or location.

Now, Tier II cities are also becoming hotspots for younger buyers. According to Cushman & Wakefield, these cities are experiencing 15–20% annual growth in housing demand, driven largely by young professionals and returnees from metros. 

Key reasons include:

• Affordability: Prices are significantly lower, often half or one-third of metro rates.
• Hybrid working: Remote and hybrid work policies allow professionals to live in smaller cities while retaining jobs in metro hubs.
• Quality of life: Less congestion, cleaner air, and stronger community living attract young families.

Additionally, an interesting psychological element of Indian homebuyer behaviour is the desire for “return-to-roots” investments. Many millennials working in metros purchase second homes in Tier II cities where their families reside. This combines emotional attachment with investment potential.

Final Take - Younger Buyers are Reshaping Housing Demand

The tide is turning. Renting may not be entirely “dead,” but the rise of millennials buying homes in India and the growing wave of Gen Z homebuyers in India shows a decisive shift toward ownership earlier in life. 

For developers, this generational change signals a structural shift in young homebuyers in real estate. In the years ahead, projects that blend affordability, community living, and modern experiences, without compromising on trust and cultural values, will resonate most with this younger audience. 

The message is clear: homeownership in India is no longer delayed until middle age. It’s a milestone that millennials and Gen Z are claiming earlier, faster, and more confidently than ever before.

Frequently Asked Questions

1. Is renting really dead for young Indians?

Not entirely. Renting still works for those seeking short-term flexibility, but rising rents and better home loan access have made ownership more attractive. For many, the rent vs buy in India calculation now tilts toward buying, especially in metros where monthly EMIs can be close to rental outgo.

2. Why are millennials buying homes in India earlier than before?

Millennials today enjoy greater financial stability through dual incomes, career growth, and better credit awareness. They also see property as both an investment and a lifestyle choice. Rising rental costs and the desire for independence further push them toward early homeownership.

3. What drives Gen Z homebuyers in India to enter the market so early?

Gen Z seeks long-term security, investment potential, and the pride of ownership. Many also want properties that align with their values such as sustainability, smart-home features, and community living. Home loans play a big role in enabling their early entry into real estate.

4. What financing options work best for young homebuyers in real estate?

Young buyers often rely on:

• Home loans with longer repayment tenures.
• Co-buying models, where siblings, spouses, or friends purchase together.
• Developer tie-ups with banks for pre-approved loans or EMI waivers.
• Government-backed subsidies under Pradhan Mantri Awas Yojana (PMAY) also help first-time homebuyers.

5. At what age are Indians now buying their first homes?

Traditionally, the average age of first-time buyers was in the late 30s to early 40s. Today, surveys show many millennials are purchasing in their late 20s or early 30s, while Gen Z homebuyers in India are entering as early as their mid-20s in Tier I and Tier II cities.