Affordable Financing Drives Indian Homeownership

Amidst evolving preferences in India’s housing market, home loans have emerged as the foremost financing option for prospective homeowners, with 80% of aspiring buyers relying on this method to fund their purchase, as per a recent report by Knight Frank India. The report, titled “Banking on Bricks,” surveyed 1,629 urban homebuyers, highlighting that factors such as property location, size, and affordability significantly influence home-buying decisions. With apartments leading as the most popular property type at 52%, followed by studio apartments (19%) and villas (17%), the study underscores a strong preference among buyers for structured living spaces within city limits.

In the financing landscape, 79% of respondents marked home loans as their primary choice, aligning with the broader trend of affordable housing solutions in urban regions. According to Shishir Baijal, Chairman and Managing Director of Knight Frank India, “India’s real estate sector is integral to economic growth, showcasing evolving buyer preferences and robust financial support systems. This enduring inclination toward homeownership, coupled with a rise in high-end property purchases, reflects a maturing market that caters to urban aspirations.” As buyers gravitate towards premium housing, streamlined financial solutions provided by the BFSI sector are playing a pivotal role in supporting India’s real estate goals, promoting homeownership and economic stability.

The report also reveals a generational shift in ownership preferences, with 80% of Gen X and millennials seeking ownership compared to 71% of Gen Z, who display a stronger inclination towards renting at 27%. This generational variance highlights differing financial strategies and lifestyle choices, with millennials focusing on upgrading their property, while baby boomers lean towards property investments for financial security. Additionally, 37% of respondents cited a desire to move into better homes, showcasing an upward trend in mid-range and luxury housing, traditionally concentrated in select metropolitan areas but increasingly visible in Tier 1 cities.

From a sustainability perspective, affordability remains a critical factor, with 45% of respondents emphasising price and value. With more buyers eyeing high-end properties, the emphasis on eco-friendly building practices and sustainable infrastructure is gaining traction. The Indian government’s focus on affordable housing, coupled with increased accessibility to home loans, supports the creation of sustainable, inclusive urban growth. This shift not only resonates with buyers’ long-term financial security but also aligns with the nation’s broader development objectives, marking a crucial step towards a balanced and resilient real estate market.