Why first-time homebuyers are driving India's next housing boom

India’s housing market could be entering a new phase of demand, driven by a large pool of young professionals reaching the stage where buying a first home has become financially realistic. According to Ishaan Ghai, Founder and Managing Director of Orbit Project Consultants India Pvt Ltd, rising incomes, dual-income households and accumulated savings are bringing homeownership within reach for this generation.

Ghai said many young professionals have now spent seven to 10 years in the workforce, giving them time to build their incomes and savings. For households with two earning members, the financial equation has become more favourable, turning homeownership from a distant aspiration into a realistic consideration.

“Buying a home, which perhaps looked quite distant when they started working, is suddenly becoming a realistic conversation,” Ghai told Business Today.

Rental costs are also influencing the decision. In cities such as Gurgaon, Bengaluru, Mumbai and Hyderabad, monthly rents can reach ₹40,000-₹50,000. For people already spending substantial amounts on rent, the question increasingly becomes whether that money could instead contribute towards owning a property.

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Greater comfort with home loans

The younger generation is also more familiar with financial products, according to Ghai. Prospective homebuyers understand credit scores and EMIs, compare home loans online and can assess their borrowing capacity before making a decision.

This greater financial familiarity has made the process of taking a home loan less daunting than it may have been for earlier generations.

The pandemic has also influenced what buyers expect from their homes. Spending more time indoors during Covid led many people to reassess their housing needs. Features such as an additional room, balcony, open spaces, security, common areas and neighbourhood quality have gained importance.

Connectivity expands the homebuying map

Improving metro networks, expressways and road connectivity are also allowing buyers to consider locations farther from established city centres. For those facing affordability constraints, better connectivity can make peripheral locations more attractive if they offer larger or better homes within budget.

However, affordability remains a key concern. Housing prices have risen considerably, and Ghai cautioned that continued supply at the premium and luxury end could leave first-time buyers with fewer suitable options.

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Affordable housing could sustain demand

For Ghai, this affordability gap represents the biggest opportunity for the housing sector. A large generation of Indians is reaching the point where they want to purchase their first home, but the availability of appropriately priced housing will determine how much of that demand converts into actual purchases.

He believes that well-built homes with good connectivity and desirable neighbourhoods, offered at manageable prices, could turn first-time buyers into a sustained source of housing demand.

Rather than being a short-term cycle, this emerging demand could therefore support India’s housing market for several years, provided developers continue to offer homes that match the budgets and preferences of this growing buyer base.