Generational shifts: How Millennials and Gen Z are shaping luxury real estate

Written by Ashok ChhajerLuxury real estate has long been associated with grandeur, exclusivity, and opulence. Historically, these qualities were reflected in sprawling estates, ornate architecture, and extravagant interiors that signaled wealth and social status. However, as Millennials and Generation Z begin to dominate the market, the concept of luxury is undergoing a profound transformation. These younger generations, shaped by unique experiences, values, and technological advancements, are redefining what it means to live in luxury. Their influence is steering the real estate market away from traditional notions of wealth and excess, towards a future that prioritizes sustainability, technology, and personalized living experiences. Millennials, born between 1981 and 1996, and Generation Z, born between 1997 and 2012, have grown up during significant global change. Economic recessions, technological revolutions, and an increasing awareness of environmental issues have profoundly shaped their outlook on life. Unlike previous generations who might have viewed luxury as an accumulation of wealth and material possessions, Millennials and Gen Z are more focused on the quality of life and the experiences that their homes can offer. This shift in priorities is changing the landscape of luxury real estate in ways that are both innovative and reflective of a broader societal transformation. One of the most notable changes is the redefinition of what constitutes luxury. For older generations, luxury often meant large homes with high-end finishes located in prestigious neighborhoods. While these elements still appeal, they are no longer sufficient to attract younger buyers. Millennials and Gen Z are more interested in how a home functions and how it fits into their lifestyle. They prioritise properties that offer well-designed, functional spaces over those that are simply large or ornate. For these buyers, a thoughtfully designed, smaller home can be more luxurious than a sprawling mansion with unnecessary rooms. Additionally, they are considerate of their everyday needs, seeking amenities such as high-speed Wi-Fi, dedicated libraries, parks, thematic gardens, and well-equipped clubhouses. These features cater to their desire for spaces that not only serve their professional and personal lives but also enhance their overall well-being. This new definition of luxury also emphasises wellness and quality of life. Millennials and Gen Z view their homes as sanctuariesplaces where they can relax, recharge, and live a balanced life. As a result, there is a growing demand for properties that offer wellness-focused amenities such as spas, yoga studios, and outdoor spaces that connect residents with nature. The inclusion of community-oriented features like thematic gardens, where each space offers a unique experience, and clubhouses that serve as social hubs, aligns with their preference for spaces that foster connection and a sense of belonging. The luxury real estate oftodayis not just about showcasing wealth but about creating environments that support physical, mental, and emotional well-being. Sustainability is another crucial factor that is driving change in the luxury real estate market. Millennials and Gen Z have grown up in an era of heightened environmental awareness, and they are deeply concerned about the impact of their choices on the planet. This concern extends to their homes, where they seek out properties that reflect their commitment to sustainability. As a result, there is an increasing demand for eco-friendly homes built with sustainable materials and equipped with energy-efficient systems. Features like solar panels, energy-efficient windows, and water-saving fixtures are no longer optionalthey are expected. The emphasis on sustainability goes beyond the individual home to include the broader environment. Millennials and Gen Z are drawn to communities that support sustainable living, including those with access to public transportation, walkable neighborhoods, and abundant green spaces. For these buyers, the location of a property is just as important as its design, and they are more likely to invest in areas that align with their values. This shift is pushing developers to consider not just the homes they build but the communities they create. Technology is another area where Millennials and Gen Z are leaving their mark on the luxury real estate market. Having grown up in a digital world, these generations expect their homes to be equipped with the latest technology. Smart home systems, which allow residents to control lighting, heating, security, and entertainment with a touch of a button, are increasingly seen as essential rather than luxurious extras. The integration of technology into the home environment offers the convenience, security, and efficiency that younger buyers value, and it is becoming a defining feature of luxury real estate. Moreover, technology is enhancing the overall living experience in ways that appeal to Millennials and Gen Z. High-speed internet, home theaters, and advanced security systems are now standard features in luxury homes. As remote work becomes more common, there is also a growing demand for homes with dedicated office spaces and high-quality connectivity. These technological advancements are not just about adding gadgets to a homethey are about creating environments that enhance the way people live, work, and play. Social media plays a significant role in how Millennials and Gen Z interact with the world, and this extends to their approach to real estate. Platforms like Instagram, Pinterest, and TikTok have become powerful tools for discovering and sharing information about properties. Developers and real estate agents are increasingly using these platforms to market luxury homes, knowing that high-quality visuals and engaging content can capture the attention of younger buyers. Social media also allows for a more personalized and interactive experience, where potential buyers can explore properties at their own pace and get a sense of the lifestyle that a home offers. Branding has become more important in the luxury real estate market as well. Millennials and Gen Z are drawn to brands that reflect their values and lifestyles, and this preference is influencing their real estate choices. Developers are focusing on creating strong, recognizable brands that resonate with younger buyers, offering properties that are not just homes but representations of a certain lifestyle or philosophy. This has led to the rise of branded residences, where luxury properties are associated with well-known brands that offer a level of prestige and recognition that appeals to these generations. Also Read: Mumbai main ghar? Dila Dunga! How city real estate content creators are changing the way you search for the perfect home Another significant shift in the market is the way Millennials and Gen Z approach homeownership. For many in these generations, owning a home is not just about financial investmentits about personal expression and alignment with their values. They are more likely to seek out properties that reflect their lifestyles and aspirations, rather than simply viewing real estate as a means of accumulating wealth. This perspective is leading to a demand for homes that offer flexibility, customization, and long-term value. The financial landscape has also changed significantly for Millennials and Gen Z, impacting their approach to homeownership. Many have faced economic challenges such as student debt and the aftermath of the Great Recession, leading to a more cautious approach to real estate investment. They are more likely to prioritize affordability and sustainability over size and extravagance. Additionally, the rise of the sharing economy has influenced their view of property ownership, with many interested in homes that can generate income through short-term rentals or other means. As Millennials and Gen Z continue to enter the luxury real estate market, their influence will only grow. These generations are not just changing the types of properties being builtthey are redefining what it means to live in luxury. The emphasis is shifting away from traditional symbols of wealth and towards a more holistic approach to living well. This means that the luxury homes of the future will be more sustainable, technologically advanced, and tailored to the unique needs and values of their inhabitants. For developers and real estate professionals, understanding and embracing these generational shifts is crucial to staying relevant in the modern market. The luxury oftomorrowis not just about opulenceits about creating homes that reflect the values and aspirations of a new generation of buyers. By focusing on sustainability, technology, and personalization, the industry can create properties that resonate with Millennials and Gen Z, ensuring long-term success in a rapidly changing landscape. The future of luxury real estate is being shaped by a new set of priorities. For Millennials and Gen Z, the concept of luxury is deeply intertwined with their values of sustainability, wellness, and technology. They are not content with the traditional markers of wealth but are looking for homes that enhance their quality of life and align with their commitment to a better world. As their influence continues to grow, the real estate market will need to adapt, offering properties that are not just beautiful and luxurious but also meaningful and aligned with the values of a new generation. The writer is Chairman and Managing Director of Arihant Superstructures ltd. The views expressed here are the individuals and dont represent those of the paper.