Investment habits of Wealthy Millennials

India has one of the youngest populations in the world today and the demographic dividend that it is said to bring carries tremendous economic heft.

Much of this economic heft will be driven by India’s millennials or those born between 1981 and 1996. Why are they so important? A Morgan Stanley report of 2017 captured their relevance to the Indian economy beautifully. 

“They sit in Mumbai cafés, browsing social media accounts on their smartphones while occasionally shopping for new shoes online. They have disposable income, a strong reliable Internet connection—and there are 400 million of them,” it said in the same report adding, “These are India's Millennials, and they're the driving force behind what could well be the country's mobile economic revolution.”

Indian Millennials could become the “largest disruptive force in India for years to come, and this trend is still in its nascent stages” it underlined further.

At over 400 million, they form about over 30% of Indian population and 46% of the workforce. Millennials are not just important to the country’s mobile revolution and e-commerce boom but many of them who have moved up the ladder are heavy investors in the Indian economy besides lapping foreign assets including luxury housing.

Investment Philosophy

Millennials are digital natives who have grown up with technology learning computers and technology in their schools and college. Sometimes even specializing in them and later taking to management degrees and creating mega or even humble startups of immense value on their own. The founder of a hotel startup valued in billions is just 30 years old, that of a travel portal is in his mid-30s, and an electric vehicle maker is in his late 30s. There are dozens of such stories across the Indian landscape. Majority of them are also found based in the tech hub of Bengaluru, Gurugram, Noida and Mumbai. The familiarity with the rise of the internet and computers has also shaped their investment approach. Many Millenials are therefore very comfortable investing in the stocks of tech giants and futuristic companies including in artificial intelligence, chip makers, e-commerce and renewable energy. Many often avoid investments in blockchain, cryptocurrency etc. though. They also appear to be more focused on long-term security when making their investments. Another trait often seen in wealthy millennials is that they are happy to pay for financial advice and sometimes rely on online financial advice. They also value the power of compounding over instant get-rich solutions and therefore keep a diversified portfolio that includes traditional real estate investments.

Real estate :

Millennials have emerged as a dominant force reshaping India's premium real estate landscape. A confluence of factors - including favourable government policies, burgeoning entrepreneurial ventures, rising disposable incomes, and a sophisticated understanding of investment - has empowered this generation to accumulate wealth at an unprecedented pace. Capitalizing on lucrative deals and market opportunities, millennials are proactively investing in real estate. The pandemic accelerated this trend, with the shift to remote work driving demand for larger, more comfortable living spaces. This tech-savvy generation desires opulent yet practical homes. They prioritize homes offering both comfort and convenience, demanding spaces that require minimal upkeep while providing a lifetime of enjoyment. This evolution in preferences is reshaping the premium housing market, underscoring the growing influence of millennials on India's real estate landscape.

Luxury homes

When a top Gurugram-based developer launched a new luxury project last year the expectation was that the flats would eventually be sold out. What surprised many were images of people queuing up outside the office of the developer at the crack of dawn to book the flats that went for around Rs 7 crore. They were sold out in a jiffy bringing in Rs 1000 crore in minutes. That in a sense captures the power of what millennials are doing – buying luxury residential properties. The demand for luxurious apartments, penthouses, and bungalows with swimming pools, ample parking, and premium interiors is so strong that developers are refocusing their energies to often building only such real estate. A recent report by survey notes that sale of homes priced at over Rs 4 crore shot up by 75% last year almost doubling from the year before. Another survey by Sotheby's International Realty found that 71% of affluent Indians intend to invest in luxury real estate within the next two years. Mumbai’s upmarket Altamount Road and Bandra experienced a 15% rise in luxury home sales, with property values often surpassing Rs 100 crore while Hyderabad’s Jubilee Hills units went for prices ranging from Rs 20 crore to over Rs 40 crore. Gurugram's Golf Course and  Golf Extension Road remained the hotspot for luxury properties too even as many are taking to pollution-free Goa for their vacation homes and often putting them up for rental when they are not using them. This trend is likely to continue as Goldman Sachs Research predicts India's affluent population will grow from 60 million in 2023 to 100 million by 2027, further fueling demand for luxury homes.

Smart homes

Well-travelled wealthy millennials also like the idea of sustainability To cater to this demographic, premium projects are incorporating eco-friendly features like solar panels, rainwater harvesting, and vertical gardens. Simultaneously, there's a surge in demand for smart homes equipped with voice-activated controls and energy-efficient systems such as smart thermostats. These advancements enhance convenience, efficiency, and environmental responsibility, making them highly desirable for modern homeowners.

Investment in Foreign Properties

A lot of the rich millenials are also buying homes in foreign locations. And while London was always the popular spot for such buyouts, Dubai has become a hot favorite in recent years. A property research report notes that there has been a dramatic shift in international real estate investment. Millenials from India are outpacing their counterparts from other countries in acquiring buy-to-let properties in prime markets like Dubai, London, and New York.

Data from the past year shows Indians comprising nearly 10% of all prospective buyers in the UAE alone, surpassing Brits and Americans. Notably, two-thirds of these Indian investors are focused on property as an investment, rather than a primary residence.

And not surprisingly the surge in demand originates primarily from India's affluent metropolitan areas, with millennials from cities like Mumbai, Delhi, Bangalore, Hyderabad, and Chennai.