Gen Z may never buy a home: Here's how India’s housing market could change

India’s next generation of homebuyers may not follow the traditional path of buying a house with a long-term mortgage. Rising property prices, uncertain employment prospects and changing family structures could push Gen Z and younger millennials towards renting for longer, potentially reshaping the country’s housing market.

In a recent column, author and economic commentator Vivek Kaul argued that India’s younger generations may increasingly find homeownership financially difficult. His argument challenges the assumption that every generation will eventually buy a house simply because previous generations did.

High prices, uncertain jobs could favour renting

Kaul pointed to the growing gap between incomes and property prices as one reason younger Indians may delay or avoid home purchases. The burden becomes more significant when a buyer has to commit to a 20- or 30-year home loan while facing uncertainty over future employment and income.

“The income uncertainty will work against taking a 20-30 year home loan,” Kaul wrote, suggesting that Gen Z and younger millennials could instead choose to rent, live with their parents or rely on family members to provide housing.

The shift could also be reinforced by changing attitudes towards ownership. Younger consumers may increasingly prefer financial assets such as stocks, mutual funds, gold or even crypto over tying a large portion of their wealth to a physical property.

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Smaller families could change housing demand

Demographic changes could further influence the housing market. Kaul noted that Indian families are becoming smaller, with urban and younger households increasingly having fewer children.

He cited the possibility that urban families in the future could have around one child on average. This could eventually reduce the need for every successive generation to purchase a separate home.

There is also another potential source of housing supply: inherited property. India already has a large stock of locked or underused homes owned by older generations. As these properties pass to children and grandchildren, more homes could become available without requiring younger generations to purchase them in the traditional manner.

Kaul noted that “more homes will become available for a population growing at a much slower pace than the past,” although incomes may not grow as quickly as they have historically.

What it means for developers and landlords

A sustained shift towards renting would not necessarily mean weaker demand for housing. Instead, it could change who owns residential property and how it is consumed.

Landlords and rental-housing operators could benefit if more young Indians choose flexibility over ownership. Kaul pointed out that rental yields—the annual rent earned as a proportion of a property's market value—could encourage landlords to keep properties available for rent.

Developers, meanwhile, may have to pay greater attention to affordable housing, rental projects and smaller, flexible living spaces rather than relying solely on the traditional aspiration of homeownership.

Home-loan lenders could also face a structural challenge if fewer young households take on large mortgages.

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However, Kaul cautioned against treating predictions about Gen Z as established facts. “Predictions are guesses. At best, slightly educated ones,” he wrote.

The larger question, therefore, may not be whether Gen Z will buy homes at all, but whether homeownership remains the default measure of financial security in India.