Millennials, Gen-Z drive 53% of demand for home loans: Report

Young adults in India, specifically those aged between 18 and 34 (comprising the Millennial and Gen Z demographics), make up 53 per cent of the total demand for home loans in the country, revealed a report by real estate portal Magicbricks.

The report further revealed that men dominate the loan applications, with a 74 per cent contribution, while women make up the remaining 26 percent. The high demand for affordable housing is evident as 58 percent of loan requests are earmarked for properties worth up to Rs 40 lakh. 

Interestingly, Magicbricks noted that Gurugram deviates from this trend slightly, showing notable demand for home loans within the Rs 40 to 60 lakh bracket (25 percent) and loans for homes priced between Rs 1 to 1.5 crore (13 percent). 

“A total of 58 per cent of the demand for home loans is for the affordable segment (up to Rs 40 lakh). Gurugram was the only outlier, where demand for home loans of the ticket size Rs 40 to 60 lakh was also significantly high (25 per cent); followed by the demand for loans of Rs 1 to 1.5 crore (13 per cent),” Magicbricks said in a statement.

The report further revealed that the demand for home loans is heavily concentrated in tier-1 cities, with 80 per cent of the applications originating from these urban centers. Mumbai, Bengaluru, and Noida lead the way in home loan disbursements, accounting for 22 per cent, 19 per cent, and 17 per cent of the total demand, respectively, as per Magicbricks.

Magicbricks also shared that HDFC, SBI and Bajaj Housing lead in terms of home loan applications on its platform.

Nimesh Bhandari, business head (home loans) of Magicbricks, said, “There is a discernible shift in the investment preferences of Gen Z and millennials towards real estate, mirroring a similar trend in the home loans category. With a stabilised repo rate, real estate remains an attractive investment asset for this demographic, and we expect a sustained surge in demand in the forthcoming months.”

He noted that Magicbricks has already worked with more than 50 financial institutions to assist smoother house loan operations, and that the company is aiming for a fivefold expansion with improved convenience and accessibility for its consumers.

The Magicbricks report is based on consumer preferences from October 2022 to October 2023 on their platform.

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