Bengaluru’s real estate landscape is undergoing a significant shift as millennials and Gen Z increasingly choose homeownership over renting, primarily driven by skyrocketing rents in the city. According to experts, the median age of first-time homebuyers has fallen from 42 to 34 over the past three years, reflecting this generational change.
The Shift from Renting to Buying
A decade ago, renters in cities like Bengaluru, Mumbai, Pune, Chennai, Hyderabad, and Delhi-NCR would move homes around nine times before making a property purchase. Today, data from proptech firm NoBroker reveals that younger generations are choosing to buy homes after just 4-5 rental moves. Rising rents and attractive home loan rates are prompting this shift.
For example, 32-year-old Abhishek Sinha recently bought a home in Whitefield for Rs 1.9 crore after renting three different apartments. Another buyer, Akshay Punjabi, invested Rs 1 crore in a prime residential project, citing the high rental returns of Rs 60,000-80,000 per month in Bengaluru as a reason for buying rather than renting.
A Growing Trend Among Younger Buyers
In the first half of 2024, over 60% of property transactions on NoBroker’s platform in Bengaluru were made by millennials and Gen Z buyers. Saurabh Garg, co-founder of NoBroker, noted that Gen Z, aged 11-26, accounted for 16% of these purchases, while millennials, aged 27-42, made up the rest.
Prime locations in Bengaluru have seen rent increases of 45-50% over the past three years, with two-bedroom apartments now costing Rs 50,000-65,000 per month and three-bedroom units reaching up to Rs 80,000.
Increased Income Levels Boosting Demand
Rising salaries in Bengaluru are further fueling housing demand among younger buyers. According to the Karnataka Economic Survey 2023-24, per-capita income in the state increased by 5.8%, contributing to the growing ability of millennials and Gen Z to afford property. Many are saving for the 20% down payment required to buy homes priced between Rs 1 crore and Rs 2 crore in prime locations.
Rental Yields Attract Investors
In addition to high salaries, lucrative rental yields of 4-5% in areas like Whitefield, Indiranagar, and Koramangala are encouraging younger buyers to invest in Bengaluru real estate. Buyers are particularly interested in properties priced between Rs 1 crore and Rs 1.5 crore for their rental potential and long-term appreciation.
