Covid-19 Impact: Work-From-Home encourages property buyers towards peripheral areas for bigger homes.
Covid-19 turned work-from-home into the new normal work culture. The social distancing requirement compelled organizations to adapt to the work-from-home culture and make it as productive for the company as they can. This new requirement of creating a space for office in the comfortable environment of your home created a ripple of change in the residential real estate industry. This blog will provide a brief on the change in the perception of the public regarding the purchase of property in these times of Covid-19. It will highlight topics including:
1. Shift to the peripheral areas of cities.
2. Change in the concept of property purchase
2. Change in the concept of property purchase
The new work-from-home norm is expected to bring a shift in the residential housing, as prospective home buyers are now planning on moving to the peripheral areas for bigger homes that satiate their need for a secure and comfortable lifestyle, at affordable prices. The belief that the new normal will be incorporated for a longer duration, the need for office spaces is increasing and is now considered as the need of the hour for efficient professional functioning.
Covid-19 Impact: Change in the concept of residential housing
The pre-COVID-19 ideology behind purchasing a home revolved around walk-to-work / short drive to the workplace which was around central corporate workplace hubs. However, the rise in work-from-home is likely to dim the shine of this concept for the middle-class. This COVID-19 pandemic has got the millennials into thinking of owning a real estate investment rather than renting one. They are looking into projects that provide spacious apartments along with Central locations that are believed to retain their glamour for HNI/C-suite buyers who can afford larger spaces there.
“Millennials’ new-found preference for buying rather than renting homes, are among the most prominent new residential real estate trends of the COVID-19 era. With the rise of the WFH culture, many may now prefer to live in more spacious and cost-effective homes in less central areas. While sufficient supply currently exists in most of the peripheries, this new demand will eventually also dictate fresh supply. Bigger homes, affordable prices, and more generous open spaces in the peripheral areas will draw demand from tenants and buyers alike,” said Anuj Puri, Chairman, ANAROCK Property Consultants. A few other factors that motivate the millennials to pursue a property investment in the peripheries are as follows:
• Affordable Lifestyle
Affordability of a comfortable lifestyle is also a rising factor in these times of the coronavirus pandemic. With uncertainty in the environment and possible losses of employment, people are looking for affordable homes irrespective of their feasibility to the workplace. Peripheral areas offer spacious rooms at affordable prices that are difficult to locate in the main city areas. They offer an opportunity at a tranquil lifestyle as compared to the noisy and congested city life. In case of real estate in Mumbai, areas within the city limits are considered to include Andheri, Vile Parle, Goregaon, Malad, Kandivali, Chembur, Wadala, Ghatkopar, Vikhroli, Powai, Mulund, etc. whereas peripheral areas include Kalyan, Bhiwandi, Dombivli, Mira Road, Vasai, Virar, Thane beyond Kasarvadavali and Owale Panvel, Ulwe, Taloja, etc. The average monthly rent for a standard 2BHK home in areas within city limits is approximately Rs 45,800, against Rs 12,500 in the peripheries.
• Home ambiance and amenities
The increase in traffic, population, and urbanization leave a desire for a more tranquil lifestyle. Real estate developers offer estate projects that often involve all necessary amenities within a decent distance from the residence. People need larger spaces to enjoy a personalized experience of activities that otherwise would require you to move out of your home. This sense of security in times of a pandemic is enough motivation for people to desire larger spaces with the necessary amenities at hand. Many real estate projects create entertainment zones for the residents to provide the comfort of enjoyment while remaining within the limits of the residence. The social distancing norms imposed restrict one indoors making it difficult to function in various aspects. Gated communities can also be lucrative for prospective property buyers in search of a safe and secured residence.
Upper east 97 offers a soothing ambiance along with essential amenities. You can experience the luxury of reflexology path, box cricket, golf put, temple, jogging track, entertainment zone, herb garden, senior citizen area, yoga center, and top-notch security to satiate your desires with a minimum connection with the outside world. The project also offers spacious apartments with a serene view to unwind a tiring day.
• Reduced repo rate by banks
The reserve bank of India reduced the repo rate by 75 basis points to 4.4 percent. The decision of the reserve bank to slash the repo rates has made home loans significantly attractive presenting prospective home buyers with a lucrative real estate investment opportunity. The steep cut has brought interest rates on home loans by public and private sector banks to their lowest, between 7.20% and 8.05%, in over a decade.
The home loans at reduced interest rates allow considerable savings opportunity as well while creating an asset for investment purposes. The additional savings can be utilized to redecorate the spaces with better interiors. The reduced interest rates have supported the idea of millennials to own a property rather than renting one.
Keki Mistry, Vice Chairman, and CEO, HDFC Ltd said that the demand for homes is expected to pick up when the lockdown is over and confidence in the economy is restored. He also stated that as work from home becomes more relevant, demand for larger spaces will increase. Some businesses are considering work-from-home a permanent change and have started evaluating its merits and challenges. The main obstacle is to derive the same productivity levels in terms of the employees on a continuous basis. The feasibility of working from home can be mutually beneficial to employees and employers if efforts are taken to realize and overcome their barriers.
To conclude, the peripheral areas of the cities are becoming a lucrative option for real estate investment due to the impact of COVID-19. The affordability factor and a chance at a comfortable and secure lifestyle make the investment option more attractive. COVID-19 has compelled buyers into purchasing bigger homes, to incorporate their work-from-home routine comfortably, that is available in the peripheral areas at affordable prices.