India faces an imminent depression, a housing-sector collapse is certain, panic all around — that is how most people would answer in one voice if asked what happens should Gen Z, the new generation, stop buying homes. Dramatic as this conventional wisdom sounds, India’s economic analysis paints a different picture.
The core question is not really whether Gen Z will want housing — they too need a roof over their heads. The real question is: will they build or buy that home, rent, or live in inherited property? Because each of these three paths completely changes how money flows through the economy.
Dr V P Singh, an economics teacher at the Great Lakes Institute of Management in Gurugram, India, has explained the matter simply.
In his view, the fear that the housing sector will collapse because Gen Z won’t buy homes is baseless. Overall housing demand depends mainly on population growth, not on the habits of any particular generation. Not all parents own so much property that their children will inherit it. So Gen Z will inevitably need homes to live in.
But who holds the ownership title is the real catalyst for the economy.
If India’s new generation decides to rent rather than buy, loan-instalment money will go into the landlord’s pocket instead of to banks or developers. So while the housing sector’s conventional financing process may stall, overall demand is not being destroyed.
Developers’ silence hides the reality
The truth emerges from businesses’ behaviour rather than from publicity-driven surveys or made-up statements.
India’s leading housing developers were recently asked about new-generation buyers’ interest. All of them — including stock-market-listed firms and some of the country’s largest — declined to comment, claiming it might expose the sector’s “downside”.
Even when one firm claimed on the record that a wave of Gen Z buyers had arrived, it withdrew the comment the moment actual sales data were requested. Analysts say no firm would want to hide good sales figures. This silence itself suggests that the rate of first-home buying by the young generation is in fact quite weak.
Changing dreams and shifting financial strategy
At the start of their earning lives, at 20 to 22, no generation can afford to buy a flat. But in India the picture is now slightly different. Not only in metropolitan areas but in small towns too, a 21-year-old today moves through the same social-media trends. As a result, rather than tying themselves in the net of a long-term home loan, there is a growing tendency to enjoy the present — spending on travel, gadgets or lifestyle.
Gaurav Udani, head of ThinkRedBlue Securities, does not see this as an abandonment of home-buying but rather as a “resequencing”.
In his view, the new generation now prefers, at 25 to 26, to first build liquid assets — such as mutual funds and equities — rather than fall into the trap of long-term EMIs. Rather than making a home their single big investment, they want to see it merely as safe housing: something to be bought later, only after enough financial stability has arrived.
A temporary jolt to the economy, long-term promise
This delay by first-time home buyers is creating pressure in three areas of the economy:
1. A slowdown in construction: when early bookings fall, work on new projects stalls, affecting everything from the rod, cement and paint industries to the earnings of daily-wage construction workers.
2. Revenue loss: when housing transactions fall, state governments’ reliable income from registration and stamp duty declines, hampering infrastructure development.
3. Risk of risky lending: if safe home loans do not grow, banks may lean toward riskier retail lending such as credit cards, personal loans or ‘buy now, pay later’.
But the money is not disappearing
This picture of monetary fear or economic collapse also points to a positive side. If the Gen Z generation saves down-payment money and invests it in equities, mutual funds or business, that capital is not vanishing. Rather, it is supplying the country’s corporate sector with relatively low-cost liquid capital.
Just as Japan and China once fell into economic risk through over-reliance on housing, young people’s current diversified investment strategy could protect the country’s economy from that one-directional risk.
India’s Gen Z will buy homes in the end — but a little later, and pouring only a small part of their total wealth into them. The housing sector’s conventional future may survive on the push of population growth, but everyone must now adjust to a new system in which the money for early purchases is split across housing, the stock market and everyday spending.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report