Gen Z is rethinking home ownership, driven less by aspiration and more by arithmetic

GenZ homebuyers are hard to find, not because they can’t afford a house, but because homes that match their lifestyle are increasingly out of their reach, especially in top metros, the BT-PRICE Gen Z Consumption Behaviour Survey shows.

Harshit Arora, the 24-year-old founder and Chief Executive Officer (CEO) of a bootstrapped marketing startup, earns enough to buy a home in Noida, but has no such plans. “Even if I am earning `5 lakh every month, it still doesn’t make sense for me to buy property because the lifestyle that I am chasing, the people that I want to network with are sitting in ultra-luxury homes, and I can’t afford to shell out `5-6 crore on a property loan. It makes more sense to rent than buy,” he says.

Even though his parents urged him to buy an apartment of his own, Arora says he is against the idea purely because prices in recent years have increased more than they did in the past few decades. “Most people end up taking loans that they can’t afford. I don’t have any loans in my name. But if I buy a property, I am locked in for 20 years. What if I don’t want to live in Noida anymore?”

Moving To Big City

As migration to major metros increases, more Gen Z individuals from smaller towns are moving to Tier I cities. Without the option of living in their parents’ homes, most end up renting, unlike earlier generations, who often stayed in the same homes they grew up in. The rethink about homeownership among Gen Z is also driven less by aspiration and more by arithmetic, mobility, and a deep aversion to being financially locked in for years.

Danish Pandita, a 28-year-old software developer who works with the German multinational athletic apparel and footwear corporation adidas, did the math to buy a “decent, bare-minimum” home in Gurugram. Low rental yields and a loan that could stretch decades into an uncertain future prevented him from rushing into buying a house. “Buying a house is a lot of liability because in metro cities, a decent bare minimum house starts from `1.5-2 crore. Life is full of uncertainty; there could be health emergencies in the family. With this uncertainty, taking so much burden doesn’t seem logical.”

Data from the BT-PRICE survey shows that only 8% respondents earning more than `15 lakh were interested in buying a house, as against 16% of respondents earning between `5 lakh and `10 lakh.

For Gen Z, renting is more than a stopgap before ownership; it’s a deliberate lifestyle choice, says Chetan Chichra, Partner, Real Estate, Grant Thornton Bharat. “From homes and cars to luxury goods and travel, this generation prioritises access over possession. It’s not that they dismiss the value of assets; they’re simply redefining their timeline. For them, stability doesn’t mean buying early; it means staying adaptable, financially resilient, and aligned with the lifestyle they aspire to build,” says Chichra.

Changing Definitions

According to a 2025 Knight Frank survey, 27% to 30% of Gen Z prefer renting over buying. “However, for the roughly 70% who aspire to homeownership, significant financial barriers remain,” says Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India.

This generation views home as less of a status symbol and more of a functional, flexible asset, says Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE. Moreover, Gen Z prefers their homes to be in proximity to workplaces, public transport, and other amenities.

Thus echoes the thinking of Pandita, who values the freedom to move neighbourhoods, or cities, if better amenities or opportunities come along. “At a young age, I don’t want too much liability,” he says. “I prefer staying on rent because it gives me freedom and choice to move to a different place for better amenities.” He also refers to the lower rental yields, adding that if he were to invest, he would rather buy land in a Tier II or Tier III city than a home in a metro city.

Arora believes that in the suburbs of Delhi, like Noida, one ends up getting a 3-3.5% rental yield. “My money sits better in an index fund, and when that index fund gives me 10-12% yield, I take that yield and put it into rent,” he says.

Going Big

Unlike earlier generations, Gen Z is going for premium and spacious homes, says Prashant Thakur, Executive Director & Head - Research & Advisory, ANAROCK Group. “While those from the lower-income segments are certainly finding housing beyond their reach now, this is not the case with all denizens of this generation. Developers are focusing on those who can buy homes,” says Thakur.

Knight Frank India’s Baijal says since many Gen Z professionals are in the nascent stages of their careers, often without parental financial backing, developers should innovate with ‘co-buying’ or equity-sharing models. “By partnering with lenders, developers can offer ‘step-up’ mortgages, where initial payments are scaled to prevailing earning capacities and increase as the buyer’s income grows over time,” he explains.

This shift, he says, requires a specialised, youth-centric approach like the established senior living sector. Baijal explains that while senior housing focuses on medical care and accessibility, youth-centric housing should prioritise productivity and social integration. “By designing buildings with contemporary amenities, whether integrated co-working spaces, high-speed fibre optics, or content-creation studios, developers can transform the home from a mere living space into a functional ‘earning space’ tailored to the modern workforce,” says Baijal.

The Future

Young buyers are adopting innovative models like co-buying with friends or family and fractional ownership to overcome the lack of affordability in metros, says CBRE’s Magazine. Developers who cater to affordability, sustainability, and digital convenience are best positioned to capture this segment in the coming years.

Bengaluru-based Prestige Group is aligning its product offerings and experiences to meet the expectations of Gen Z. “This includes enhancing digital engagement, offering virtual property tours, flexible financing options and curated homes with wellness-focused amenities,” says Praveer Shrivastava, Sr. Executive VP, Residential, Prestige Group. Further, the removal of house rent allowance benefits in the new tax regime underlines the cost of long-term renting and naturally shifts the economic calculus in favour of ownership, says Shrivastava. “We believe this will contribute to an uptick in ownership intent among young professionals, particularly in emerging micro markets where pricing remains accessible,” says Shrivastava.

While owning a house remains a distant dream for a majority of Gen Z, they mostly agree on their second-biggest purchase, a car. Pandita, who bought his first car last year, says it has become a necessity.

Gen Z customers look for connected cars and other tech features, says Partho Banerjee, Senior Executive Officer, Marketing & Sales, Maruti Suzuki. While buying his first car, Pandita wasn’t much concerned about mileage. Powerful engine, driving experience, service network, and safety rating were on the top of his checklist. “Earlier, fuel efficiency and cost of ownership were the top priorities. Today, Gen Z is more interested in connected cars, infotainment systems, and tech like ADAS. They are tech-driven,” he says.

As far as buying a home is concerned, until prices, products and policies catch up with how this generation lives and earns, renting—once seen as a compromise—has become a deliberate choice.

@karandhar11