As WFH is gradually becoming a norm, homebuyers are preferring value-for-money homes in townships rather than the hitherto popular close-to-work options
As WFH is gradually becoming a norm, homebuyers are preferring value-for-money homes in townships rather than the hitherto popular close-to-work options
Amid COVID-19, we have observed that all the sectors, including the realty sector, have been impacted. This wave has raised the need for the real estate sector to recognize, understand, and react to the challenges of the New Normal with innovative and thoughtful measures. The real estate structure has significantly changed from ‘traditional’ to an ‘advanced’ format. As disruption is the new normal, real estate players are enhancing efforts to make a substantial mark in the industry.
This progression affords a great deal of experimentation and incorporation of smarter technologies like Artificial Intelligence, home automation, virtual tours, or IoT among real estate players. Now, companies need to incorporate the norms of social distancing, mobility, density, and hygiene while planning and implementing projects.
Here are some of the prominent trends observed this 2020:
1. Real estate market growth in Pune, Bengaluru, and Hyderabad:
The pre-COVID era saw a surge in demand for properties in these cities. Post the pandemic, consumers had many apprehensions about the real estate market due to the fluctuation in price and demand. While prices have declined moderately, a higher percentage of consumers are coming back to the market to seek good offers. This clearly states that the buying intent in these three cities has not been impacted as compared to markets like Mumbai, Delhi, Gurugram, and Noida.
2. Smarter options with high-quality offerings
The idea of investing in a township has emerged as one of the largest trends in the new normal. Home seekers are realizing the importance of investing in a complex that combines space, amenities, work benefits, entertainment, and much more. Addressing consumer demand, real estate players are designing large spaces with a provision to accommodate an office set-up for home seekers. Advance facilities like voice-activation, high internet bandwidth, elevators with higher capacities have become mandatory.
3. Work-from-Home changes buying patterns and preferences:
For millennials and IT employees, the Work-from-Home model is popularised as a norm, rather than an exception. While opting for homes, the proximity of the house to the workplace is not seen as a priority anymore. Post-COVID, offices may start again, but the scenario will not be like before. This has resulted in a shift in buying patterns with homemakers looking for better housing options that are not necessarily close to their workplaces.
4. Preference to own a home rather than rent a home:
Buyers are now keen on owning a home rather than renting one due to the Relax Payment Schemes or easy EMIs that a lot of builders like VBHC are making available.
5. Real estate players upgrade manufacturing technology
Buyers tend to steer clear from high-cost projects by local players and opt for Value Homes at affordable prices by National Players. This means that builders will have to have to make more investments and upgrade their manufacturing technology for their projects. Modular construction like precast systems, formwork systems, steel construction is soon becoming de rigueur. These technologies are beneficial especially when labour is not easily available.
6. CLSS will prove to be a boon for first-time homebuyers as well as the sector
The Central Government has been taking several measures to bring back the trust factor in real estate. CLSS is among those measures and was introduced in June 2015, under which an upfront interest subsidy of up to Rs 2.7 lakh is provided to the first-time homebuyers falling in the categories of Economically Weaker Section (EWS), Lower Income Group (LIG), and Middle Income Group (MIG). Under this scheme, a home buyer who avails a housing loan from any financial institution, be it a bank, housing finance company, or another such institution is eligible for an interest subsidy of up to Rs 2.67 lakh. By extending this scheme to March 2021, has proved to be a big boon for the sector to tide over the COVID crisis.
To conclude, the investment pattern as far as home-buying is concerned, has changed for the better. The pandemic has resulted in homebuyers preferring value-for-money homes in townships rather than the hitherto popular close-to-work options. There is a surge in demand for owning a home rather than renting one. For builders, this is a good time to realign energies, think afresh, and reimagining solutions.
The author Managing Director & CEO VBHC Value Homes