With covid-19 forcing people to stay in, homes are not only doubling as offices, as people work from home, but are also becoming the space people spend most of their time in. This, together with the lifestyle changes that the pandemic has brought in, are set to change the residential real estate segment in more ways than one. Nilanjana Chakraborty asked four industry experts to weigh in on what demand-driven changes can be expected in the residential units as the needs of homebuyers change in the wake of the pandemic.
The focus will shift to larger formats such as 2.5, 3 BHK flats
With the advent of work from home, we may see some of the mid-income residential demand pushed to the far suburbs and even smaller cities. For those who can afford it, the walk-to-work option will become more important.
For many, the focus will be on slightly larger formats such as 2.5 and 3 BHK flats, and on societies with sufficient security. There will be increased interest in integrated townships with stand-alone social and civic infrastructure. Proximity to healthcare, shopping and schools will continue to be relevant. Buyers are increasingly gravitating towards quality developers with established brands and quality assurance.
A ready-to-move-in home will be the first choice for most people, and the rest will focus on projects in advanced stages of construction with six months or less until completion. Branded developers will corner the market, as they are most likely to complete projects on time. Buyers will prefer projects with the option to view them online audio-visually.
Covid-induced design changes may become redundant soon
Residential realty is expected to remain under pressure due to the erosion of buyer confidence, despite the fact that loans rates are at the lowest now. The segment will need remedial measures. Demand will grow when the government takes demand-boosting measures by providing economic stability and long-term growth.
Space will remain at a premium in top cities, therefore, creating designs to incorporate aspects of social distancing may be tough to come by. Any change in designing will have to be done with a long-term perspective, as homes take between 36 and 40 months to be delivered. Pricing would be a significant factor in bringing back demand once the economy stabilizes, therefore, creating more homes for price-sensitive buyers may become a priority for property developers.
As per reports, we may have a drug or a vaccine for covid-19 in a few quarters, which can make homes designed now, with social distancing factors in mind, redundant and expensive.
Focus is now on agile designs with workspace elements
The covid-19 pandemic is bringing about some seminal changes in buying behaviour for residential real estate. Uncertain economic forecasts and job security concerns have limited buyer activity at present, with decisions currently being deferred, though some are looking at the current market dynamic as an opportunity.
Covid-19 has confined people to their homes and with a prolonged work-from-home scenario looming, many have realised the inadequacies of their current homes in terms of dedicated workspaces while support facilities or amenities and health and safety have also taken on a vital importance. Hence, there is now focus on agile home designs, which incorporate workspace elements.
Developers are looking at such home+office concepts, which will be more attractive for buyers. Buying patterns will also gravitate towards established players offering new projects even as we see a consistent trend in looking at ready-to-move-in homes or those close to completion.
Many people may consider buying homes outside cities
Covid-19 has accelerated consolidation in the real estate sector. We will have only a handful of established and renowned players who will cater to the majority of homebuyers. Developers with strong balance sheets will survive.
India never had a demand issue, but we always had a demand-supply mismatch, as most developers focus at the peak of the pyramid. There are a few credible developers with inventories in the affordable and mid-segment housing.
As far as changes in the demand scenario is concerned, homebuyers are looking for bigger flats where they can have a separate room or a corner to set-up an office or work desk. While it would be difficult for buyers with budget constraints to buy bigger homes within city or locations near to central business districts, many are exploring suburbs or periphery of major cities.
Homebuyers will not mind the distance from the city as they will have flexibility of work from home and going to the office only for a few days in a month.