Why Home Loan Market for Millennials is increasing Post COVID

The number of Coronavirus cases seems to have no end these days. The pandemic that forced the world into a lockdown in early 2020 has also crippled the world economy. A recession is nothing new in the history of the world, and this one is also coming with its own share of changes and revolutions.

One of the most noteworthy areas to look for trends in the real estate and home loan market. As the idea of owning and living in a house, leveraging property, and much more is changing, so are buying and borrowing patterns. Let us first look at the key home loan trends.

Emerging home loan trends

1. Bengaluru, Hyderabad, and MMR (Mumbai Metropolitan Region) seem to be the favourite destinations for home buyers. Real estate companies which have increased focus on digital operations in these cities are at an advantage.
2. The key reasons for new home buyers seem to be reduction in home loan rates and the need for an added sense of financial security.
3. In a recent survey, more than 36% of people said that they would prefer properties within a sub-45 lakh budget.This is majorly a result of depleting personal finances.
4. It is a fragile time for the economy, so naturally buyers are inclined towards sellers who have a reputed brand and pose lesser risk.
5. More and more people seem to now prefer RTM (ready-to-move) homes.
6. Lastly but most importantly, millennials seem to be more enchanted with the idea of owning a house. Let us find out more about this trend.

Before delving into the millennial angel, let’s first try to understand general home ownership and home loan trends in the pandemic.

The rising importance of owning a house

1. People have begun to realize the necessity and financial security of having a stable home as compared to living in rented accommodation.
2. Real estate is currently a safer and less volatile investment to make rather than stocks and other instruments which are highly unpredictable.
3. The fall in home loan rates is only helping these sentiments become stronger.
4. Lower rates allow for higher prices and bigger homes, provided you have the finances.

Additional Read: Why Do Millennial Women Take More Loans Than Men

Millennials and home loans in a pandemic age

Millennials are the favourite target groups for all brands and industries, with good reason. They are India’s core wage-earners, forming 47% of the working age population of the country. It is interesting to note that in multiple surveys last year itself, millennials were seen to be accounting for a lot of leisure expenses in their budgets as compared to stable investments. However, that seems to be changing, given the precarious economic situation, pay cuts, job losses, and family duties.

It has been noted that millennials, the free-spirited generation, are willing to buy a house and opt for a home loan more than ever. The number of millennial home loan customers has risen by close to 10%. Here are the key factors contributing to this trend.

1. Millennials have disposable incomes, and don’t want to waste any time in taking actions necessary for financial well-being.
2. The increase of digital operations in the real estate and home loan sectors has made it more accessible and millennial-friendly.
3. The demand for a moratorium on home loans has decreased. Millennials are trying to make more financially sound decisions.
4. Affordability is improving thanks to real estate prices having corrected by nearly 20 to 25%. These benefits are being given out in the form of either direct benefits to or discounts to buyers.

Additional Read: Changes in Home Loan Interest Rates After Coronavirus

Conclusion

It is surely a great time to buy a house for anyone, millennial or not. Savings can be tough in such times. But if you’re lucky enough to gather some, you ought to use them wisely and invest in something as permanent as a home. A home will serve as not just financial security but also mental peace.

If you have been worried about finding the right home loan, we’d first suggest conducting extensive research. Once you evaluate all your options in depth, choose the one that suits your financial needs the best. After all, it’s a purchase of a lifetime.

One of the most lucrative home loan products is Tata Capital’s Home Loans. These loans are tailor-made for purchasing or constructing your dream home. Extending from Rs.2 lakhs to Rs.5 crores, you can enjoy affordable home loan rates of around 8.50% (terms and conditions apply). You can also easily apply and manage your loan through a home loan app for a seamless experience.