Property investment in 2021: Lifestyle choices influencing real estate purchase in post-pandemic era
After a turbulent year, the Indian housing market is gradually recovering from its pandemic blues, seeing home sales up 51 percent quarter over quarter in the fourth quarter of 2020. This recovery is due to an increasing shift towards home ownership in the US country.
According to NoBroker.com’s India Real Estate Report 2020, 82 percent of Indians plan to buy a property in 2021 amid uncertainty caused by the virus outbreak.
With demand for residential real estate soaring in 2021, real estate providers are excited about the growth opportunities ahead. This resurgence is marked not only by a quantitative revival, but also by a qualitative shift brought about by the impact of the pandemic on consumer prospects and sensibilities.
As a result, several new projects are pending, from affordable housing to premium housing, even if existing suburban housing developments in top metropolitan areas continue to see increased consumer interest.
Before real estate companies commit to a project, however, they must adhere to the tenet of the sector: Buying a home is an investment that, like all investments, is influenced more than ever by the lifestyles and preferences of buyers. The buyer’s lifestyle must therefore be seen as a major factor before starting any new business – and to make accurate decisions based on that, we first need to understand the different demographics of the buyer.
Real Estate: Types of Buyers to Expect and Most Likely to Choose
Consumers buy real estate for two main reasons: as an investment or for end use. When buying real estate, those buying homes as investments prioritize factors such as low initial investment costs, high expected returns, the value of assets, future growth potential, and market trends.
The demand for vacations and second homes in places like Dehradun, Rishikesh and Goa has increased in the wake of the pandemic due to the increasing adoption of remote working. In line with this trend, the most lucrative real estate investment destinations are shifting from metropolitan areas like Delhi and Mumbai to tier 2 cities that offer cheaper real estate and better returns on capital.
For end users, on the other hand, aspects such as convenience, access to amenities, safety and standard of living have priority. The needs and requirements of this population group can be further broken down by age group, lifestyle and family structure.
For example, retirees who are likely to opt for quieter, safer places on the outskirts of the city want immediate access to amenities like quality health care, groceries, and other essentials. The move will also remove them from COVID-19 hotspots in urban centers, which they are more prone to in their more advanced ages.
Away from the metropolises: Why end users want to buy a house in the suburbs
Younger professionals who have long preferred metropolitan areas like Delhi / NCR, Mumbai and Bengaluru for better job opportunities are also starting to move. With the advent of remote work policies, it is no longer necessary for them to live physically closer to physical offices. With the cost and time of commuting no longer an issue when choosing where to live, many single and cohabiting migrants are choosing to move to either neighboring suburbs or nearby Tier 2 cities in more spacious homes a cheaper price to switch costs.
The logic behind this migration back is simple: you can easily swap high monthly rents in metropolitan areas for EMIs on home loans, adding a tangible asset to your name in the process. Suburban and Tier 2 areas also have lower cost of living, allowing these young professionals to free up more value and savings for their income. The larger living spaces on offer also enable them to set up dedicated home offices – an essential requirement in the age of remote work. So it’s no wonder that the share of thousand-year-old buyers in the real estate market has increased from 49 to 63 percent after Covid.
Larger living spaces are also a priority for homebuyers with families. Having multiple members attending online meetings or courses at home cannot overemphasize the need for multifunctional spaces in which to work, study, or engage in other activities undisturbed. Potential buyers with school-age children also consider proximity to good schools when making a commitment to purchase. As the pandemic restrictions gradually ease, science is likely to implement a mix of online and classroom-based models of pedagogy. As a result, places with easy access to schools will be high on these home buyers’ lists.
The growing demand for greener environments and better amenities
During the pandemic, homes also took on various roles as offices, schools, gyms, yoga centers, and recreation rooms. This lifestyle change has emphasized the importance of good ventilation, adequate lighting, and comfortable living areas that promote peace of mind in the individual’s life experience.
As a result, there is a greater demand for more spacious homes in all population groups, with areas such as balconies, patios, patios and backyards increasingly valued. The desire for greater self-sufficiency has also led to an increase in the demand for smart devices such as washing machines, dryers, dishwashers, refrigerators, ovens, ovens, and microwaves. The built-in space for such devices in kitchens and bathrooms will therefore be beneficial during the sales process.
The increasing emphasis on holistic wellbeing is also leading to an increased appreciation for green spaces and parks, as they offer the opportunity to be outdoors, but without the risk and responsibility that other public spaces bring with them. Accordingly, homebuyers are looking for residential areas that offer easy access to parks and green spaces. There is also a growing demand for safe and walkable access to essential facilities and amenities that takes precedence over other factors such as distance from work.
As a result, there is a greater demand for residential buildings that provide facilities such as community halls, children’s play areas, gyms, walking trails, and pleasant outdoor spaces. 61% of potential homebuyers would like to move into gated housing associations in order to take advantage of advantages such as easy access to reserved space and better security by living in the community. By partnering with leading society management apps, which enable limited physical contact environments and contactless access for company employees and guests, real estate providers can also offer their customers added value.
Overall, the outlook for the Indian housing market appears extremely positive in 2021 thanks to strong buying sentiment. However, to capitalize on these trends and achieve optimal returns, real estate providers need to identify the stated and unspecified requirements for target consumers given the location, city and demographics. This can help them provide the most relevant housing and investment opportunities to potential homebuyers, and accelerate the growth of the industry – and, consequently, the nation.
The author Amit Agarwal is the co-founder and CEO of NoBroker. The views expressed are personal