By 2030, Millennials and Generation Z are expected to account for 60% of new homebuyers in India, according to JLL’s year-end residential market note, as published by The Economic Times.
As the Indian residential market continues its upward trajectory, these younger generations are anticipated to drive the shift in the housing landscape.
Millennials, born between the early 1980s and early 2000s, and Generation Z, born between the mid-1990s and early 2010s, are emerging as the key demographic in homeownership. Their entry into the housing market is set to transform the industry, with urban homeownership rates projected to rise to 72% by 2025, up from 65% in 2020.
This shift will be largely supported by affordable financing options and a younger, tech-savvy demographic entering the housing market.
The residential sector is also witnessing significant growth in Tier II and III cities. Smaller urban centers like Jaipur, Indore, and Kochi are expected to contribute to more than 40% of new housing developments by 2025. These cities are emerging as vital growth hubs for the housing sector, driven by factors such as rapid urbanization and changing consumer preferences.
As a result, the housing sector is expected to contribute 13% to India’s national GDP by 2025, reflecting its resilience and expanding role in the country’s economic growth.
Sustainability, once considered a luxury, is now viewed as a necessity in the housing market. JLL forecasts that by 2025, green-certified buildings will account for 30% of new residential projects, a significant increase from 15% in 2020. The demand for sustainable development is growing as buyers increasingly prioritize eco-friendly, energy-efficient homes.
In addition to sustainability, the report highlighted a rising interest in smart homes and tech-integrated living spaces. These innovations are reshaping the residential real estate landscape, offering buyers more convenience and smarter living options.
India’s housing market is projected to evolve into a USD 1-trillion market by 2030, driven by demographic shifts, policy reforms, and global trends. The residential sector is expected to see continued growth in the coming years, further propelled by technological advancements and the increasing demand for affordable housing.
JLL’s report also indicated a strong performance in 2024, with residential sales increasing by 17% compared to 2023. Approximately 85% of the total units sold in 2023 were sold by mid-2024, showcasing the growing demand for homes in India’s expanding real estate market.
The housing sector’s resilience and potential for growth position it as a key driver of India’s economic future. The rise of Millennials and Gen Z homebuyers, along with the increasing importance of sustainability and technological innovation, will continue to shape the country’s housing market in the years to come.