The recent survey by Knight Frank, titled "Banking on Bricks" and encompassing 1,629 respondents, reveals key trends in Indian urban homebuyer preferences. The findings highlight a dominant preference for apartments, with 52% of respondents favouring them. Studio apartments and independent houses or villas follow, preferred by 19% and 17%, respectively. Gated communities and plots of land are less popular, chosen by only 7% and 5% of respondents.
Homeownership is strongly favoured, with 80% of respondents preferring to own a home compared to 19% who prefer renting, and 1% who remain uncertain. This trend is consistent across generations: 79% of Baby Boomers, 80% of Gen X, and 82% of Millennials favour homeownership. However, Gen Z shows a higher tendency towards renting, with 27% preferring this option.
Reasons?
The reasons for purchasing a home vary by generation. Millennials (39%) and Gen Z (36%) are leading the trend in upgrading and purchasing for end-use. Baby Boomers show a stronger interest in investments (29%) and retirement plans (15%). Overall, 37% of respondents are upgrading to a better home, reflecting a shift towards mid-range and luxury housing, particularly in Tier 1 cities. Additionally, 32% are first-time homebuyers for end-use, 25% are investing, and 7% cite other reasons such as retirement or acquiring a second home.
Shishir Baijal, Chairman & Managing Director, of Knight Frank India, said “India's real estate sector is not only pivotal to our economic growth, contributing significantly to GDP and employment, but also reflects evolving buyer preferences and financial support systems. Our latest survey highlights this continued preference for homeownership, with 80% of respondents aspiring to own homes and a growing trend toward premium properties, particularly in urban areas. As the BFSI sector facilitates this growth—offering home loans, investment avenues, and risk management tools—combined with emerging technologies and infrastructure advancements, we anticipate a resilient real estate landscape that aligns with India’s broader development goals."
Location remains a top priority for 50% of respondents, underscoring its importance in real estate decisions. Property size and layout (45%), along with price and affordability (45%), are equally significant. Homebuyers seek value for their money while meeting lifestyle needs. Builder’s reputation (35%) and proximity to the workplace (33%) also play crucial roles, highlighting the demand for reliability and convenience. Amenities are becoming increasingly important, with 32% of buyers looking for integrated facilities such as gyms, parks, and co-working spaces.
The Preferred Mode Of Financing Across All Income Groups
Home loans are the preferred mode of financing across all income groups, with 79% of respondents relying on this option. There is variation among affluent homebuyers, with 83% of households earning between Rs 1 million to Rs 5 million preferring home loans. In contrast, wealthier individuals with household incomes above Rs 5 million show a higher inclination (19%) to use personal savings or liquidate investments compared to 11% in the lower income group.
Homebuyers' expectations from banks and financial institutions during the homebuying process include competitive interest rates (74%), flexible loan tenures (48%), and a quick loan approval process (38%). Guidance on legal and documentation aspects is important for 25% of respondents, and 15% value home insurance options.
