Over the past decade, technological advancements have seen remarkable progress in the country across all sectors, including real estate. Particularly in the aftermath of the pandemic, the real estate sector has witnessed the emergence of new investment opportunities and avenues in both metros and tier-2 cities. Among these trends, fractional ownership has gained significant traction in the commercial real estate space.
This new concept of fractional ownership, which started in 2019, just before the pandemic, allows people to invest a small amount of money and own a portion of the property.
This new commercial real estate segment presents a significant opportunity for ‘Zoomers’, or members of Generation Z. ‘Zoomers’ is a term often used to refer to members of Generation Z, the demographic cohort succeeding Millennials, typically born between the late 1990s and early 2010s. They’re called ‘Zoomers’ because they’re considered the first generation to grow up with widespread access to technology and the internet, including video conferencing platforms like Zoom. This generation uses technology to expedite every aspect of their lives, from booking a cab to ordering food or educating themselves.
How Gen-Z can seize opportunities in the fractional ownership market
Zoomers have a unique chance to transition from digital interactions to physical investments. The fractional ownership market is projected to soar over tenfold by 2030, offering Gen-Z the opportunity to capitalize on this burgeoning segment. By embracing this trend, Zoomers can not only secure their financial future but also actively participate in shaping the country’s economic growth. Real estate stands as one of the pillars supporting the structure upon which the economy rests.
Mananki Parulekar, Co-Founder, of Claravest Technologies, explained why fractional ownership model is good for Zoomers or Gen-Z.
“Until now, one option that this generation did not have access to invest in was Real Estate. Historically, real estate was always an asset class that seemed very inaccessible to young people, primarily because of the high financial capital required to invest and the amount of due diligence and time that would go into finding a good investment opportunity. This, as I said, is truly a problem of the past,” Parulekar asserted.
She further said that ‘Zoomers’ have had a unique experience due to the recent pandemic. They’ve realized the power of technology in getting things done from one place, whether it’s working their job, ordering food, booking transportation, or investing money, she pointed out. “The pandemic has sparked a growing interest in passive income among everyone, leading to a surge in the number of retail investors. With the introduction of 0% commission stock trading platforms, investors can now invest in stocks from the comfort of their couches.”
According to JLL-Propshare analysis, the fractional ownership market in India is predicted to grow over 10 times to surpass $5 billion by 2030, Parulekar said adding that the Zoomer generation can take advantage of this booming industry and grow with it.
Real estate not as volatile as the stock market
On the benefits of real estate investment, she highlighted that the value of real estate can never reach zero, unlike the equity market. While real estate values might depreciate due to location or circumstances, it is very unlikely that your investment will drop to zero, she asserted, adding that real estate is also not as volatile as the stock market and provides great returns in the long term.
“Real estate provides a great avenue for ‘Zoomers’ to diversify their portfolios. Investing all your money in one basket is a risky game; diversification of your investment profile can help reduce the associated risks,” Parulekar concluded.