Rooted in
Realty - India’s Property Passion
Dr.
Prashant Thakur, Regional Director & Head – Research, ANAROCK Group
“Beta,
ek ghar toh apna hona chahiye…” - a phrase every Indian has heard growing
up, echoing through generations, across dining tables and WhatsApp family
groups. Owning real estate is not just an aspiration in India — it is woven
deep into our cultural, emotional, and even spiritual fabric.
What lies
behind this deeply embedded love affair with property? We can partially decode
it through anecdotal examples, data, and a look into the Indian psyche.
Legacy Over Liquidity: Property as a Multigenerational Asset
In many
Indian households, a home is the only tangible inheritance passed down through
generations. We often hear stories of ancestral homes that have stood for over
a century, becoming a family's identity.
In
Kolkata’s Shobha Bazar, a 120-year-old mansion still houses five generations
under its roof. It has weathered Partition, political upheavals, and latter-day
redevelopment offers, but the owners refuse to part with it. “This home is our
history,” the octogenarian matriarch says.
According
to 2023 ANAROCK report, 68% of Indian homebuyers are end-users, and a whopping
80% plan to pass on their property to their children. Unlike supply/demand and
pricing, such data does not tend to change - it represents the psyche, not the
market. It reaffirms that in India, real estate is not just about investment
but also about legacy.
Culturally Conditioned — “Rent is Rinse Money”
In
Western economies, renting is often seen as practical and flexible. In India?
Not so much. To many, paying rent is akin to feeding a black hole — money is exiting
pockets without building any equity. On the other hand, property is seen as a
store of value.
A 2022
RBI survey on household finances revealed that real estate comprises nearly 77%
of total household wealth in India, compared to just 35% in the US.
A
30-something IT professional in Pune, despite having access to good company
housing, chose to purchase a INR 1 crore apartment. “Renting feels like
bleeding money every month,” he says. “At least, EMI gives me ownership.”
The 'Indian Mindset' of Safety: Real Estate as a Hedge
Stock
markets? Risky. Mutual funds? Volatile. Crypto? “Beta, gambling mat kar.”
Despite
being illiquid and slow to appreciate in some areas, real estate is seen as
safe, tangible, and immune to overnight collapse. During the 2008 global
financial crisis when property markets in the West plummeted, India’s top 7
cities saw only a marginal dip and prices largely held firm due to low system
leverage and strong end-user demand.
Even
during COVID-19, Indian real estate demonstrated remarkable resilience. By
2023, the sector had bounced back and witnessed record-high launches and sales,
with over 4.76 lakh units sold across the top cities.
In the
West, buying property is largely a 'head', not a 'heart' thing. People buy it
when 'it makes sense'. In India, not buying property when you can - and
sometimes even when you can't - makes no sense. Indians buy property 'from the
heart' and apply their full minds to make it happen.
It
doesn't matter if others don't get it. "We are like that only" - and
will always be.
Tax Incentives and EMI Culture: Government's Subtle Nudge
Over the
years, the government has consistently incentivised homeownership. Subtly, and
intelligently - no seductively low lending rates that suddenly turn savage
(read sub-prime crisis) here.
- Section 80C and 24(b) tax
benefits for home loans on principal and interest repayment.
- PMAY and stamp duty rebates
for first-time buyers in various states.
- Enhanced interest deduction
under Section 24(b) – Union Budget 2025 raise this to INR 3 lakh from INR
2 lakh for self-occupied homes.
- Interest subsidies under
PMAY-CLSS ranging between 3-6.5% for various income levels on home loans
up to specified limits.
- 1% GST on under-construction
affordable homes, as opposed to 5% on others
Some
states also provide first-time buyers relief of stamp duty and registration
fees. These incentives lower the cost of and encourage homeownership. Combined
with the emotional push from parents and easy access to home loans, buying
becomes the default choice.
Renting
is for those who are getting ready to buy. After COVID-19, even die-hard
renting millennials with a 'Western mindset' hangover, have become convinced
buyers. According to SBI’s 2023 home loan portfolio, over 70% of their retail
lending is to salaried individuals aged 30–45, often first-time homeowners.
The Social Status and the “Log Kya Kahenge?” Factor
Let's be
honest. In India, owning a home is also about perceived stability and social
standing. Whether arranged marriage matchmaking or Diwali card parties, “Do you
own your place?” is more than a casual question — it is a character
certificate.
In Delhi
NCR, a marketing manager candidly admitted, “When I was on matrimonial sites, I
noticed matches improved once I put ‘owns a 2BHK in Gurgaon’ on my profile.”
Urbanisation and the Fear of Missing Out (FOMO)
India is
urbanising like there's no tomorrow - nearly 42% of the population is expected
to live in urban areas by 2035, from 34% in 2022. Property prices are tracking
this trend, on steroids. With this comes a deep-seated fear - if I don’t buy
now, I may never be able to afford it.
According
to ANAROCK Research, the average ticket size in Mumbai increased from INR 1.5
crore in 2020 to INR 2.15 crore in 2024. The thought of being 'priced out'
spurs younger buyers into early action, even if it means stretching finances.
Real Estate as a Second Income
Unlike
earlier generations, modern Indians don’t just buy to live — they buy to earn.
From co-living spaces to short-term rentals on platforms like Airbnb and Stanza
Living, property is an income generator today.
Fractional
ownership in commercial real estate is booming among HNIs and NRIs eyeing INR
10–25 lakh investments that can yield 8–10% annual returns. Platforms like
Strata and hBits are seeing exponential growth.
Not Just Bricks and Mortar
The
quintessential Indian love affair with real estate is an emotional investment
cloaked in rationality. It is about stability, status, security, and sometimes,
just a sense of having 'arrived' in life.
To
paraphrase the slogan of a Mumbai-based architect, we don’t buy homes in India.
We write our stories – one EMI at a time.
