Five Expected Shifts in Residential Real Estate Post COVID — 19
TownSIP Research ~ 15 min read
In residential real estate sales, we have always seen people opting for location over cost and carpet area. A majority of customers choose homes closer to the city center, offices, malls, and theatres. These reasons are the underlying causes of the high Per Square Feet (PSF) cost of Viman Nagar, Range Hill Road, and Koregaon Park.
As our Pune city is expanding horizontally the PSF of Kharadi, Baner is also rising due to similar reasons. Metaphorically, a city expands like a Banyan tree, slowly, steadily towards the outside periphery. A decade back, an area that used to be outside the city limit is now considered as a party hub.
With the unexpected arrival of COVID19, the trend and preferences of home buying could change. Enlisted below are the 5 expected shifts in living because of COVID.
1. Contactless living to reduce epidemic risk
The greatest weapon against the fight with COVID19 across the globe has been social distancing. However, is it truly possible to achieve social distancing in our modern homes?
Our apartment buildings aren’t designed to cope with life during a pandemic, and this upside-down way of living has turned them into “a disorganised array of disconnected bedrooms and studios”, says Lydia Kallipoliti, Assistant Professor of Architecture at The Cooper Union in New York.
Quarantine becomes challenging in crowded or small apartments because of many common touch points. Common Garden, Common Amenities, Common gym used to be a great selling point for builders but now the trend might shift. People would either avoid such places and/or try to build a small version of everything within the home.
Looking at the Ward Wise Corona Patients data from Pune, it can be stated that the maximum number of cases are from most crowded areas. Proximity to market, malls, or theatre generates crowds in such areas, making them the hotbed for pandemics.
With COVID, now we have realised the difference between essentials and non-essentials, and buyers would start looking for essentials shops rather than proximity to the city center, malls, and theatre.
Post Covid, none of us will be Prisoner of Geography
2. The rise of Suburban Living
The 21st Century has so far seen SARS, MERS, Ebola, H5N1, Swine Flu, and now Covid19. If we have indeed entered an era of pandemics, how might we design the cities of tomorrow so that the outdoors do not become a no-go zone, but remain safe and habitable space?
In recent years, calls for cities to focus on health in their planning have been growing. “For the resilient, sustainable cities we all want and need, urban plans need to be designed, evaluated, and approved using a health lens,” says Layla McCay, Director for the Centre for Urban Design and Mental Health.
There are many examples of the same. Since 2016, the National Parks Board of Singapore has been building therapeutic gardens in public parks to boost the mental and emotional well-being of citizens. In Tokyo, citizens are working with urban designers to greenify their neighborhoods to improve their health.
In Maharashtra, the government took up an initiative to build self-sustainable townships that are not dependent on any basic need on the municipal corporation. To encourage people settling down in such township the stamp duty too was reduced to almost half to 3.5%.
Suburban life allows a buyer to look for affordable PSF for an independent house that provides advantages in maintaining social distance in times like today. A few of the advantages being available are growing your own vegetables and fruits in Garden or Terrace and no use of a lift or common Foyer.
3. Office / Party / Pet-Friendly Home
With WFH going to be prominent, everyone would be either looking for additional office space inside the home or begin converting a room into office space. A recent announcement by TCS that 75% of 4.5 lakh TCS employees to permanently work from home by 2025 is a big shift in how corporates operate, it followed announcements by other tech giants too. This will surely impact commercial real estate but the culture of a home office will take a surge and everyone would be doing a setup change at their home.
Get-together at restaurants and hotels would be avoided by people. There could be a rise in house parties. A buyer would definitely look for a home that is party-friendly.
Many of the societies are always discouraging towards keeping the pets at home. However, Covid19 and its after-effects may lead to isolation due to job loss and social distancing. These factors could also lead to failed relationships and emotional turbulence. The Pet industry could see a boost along with pet-friendly societies.
4. Rent as an income source or pension
The recent Reserve Bank of India’s (RBI) policy decision to slash repo rates by 0.75 basis points (bps) and further by 25 bps has made home loans significantly attractive, presenting potential home buyers with an opportunity that cannot be missed. This steep cut has brought interest rates on home loans by banks to their lowest, between 7.80% and 8.2% and that is the lowest over a decade. That means that your loan period for same EMI reduced by 3–4 years for over 20 years of home loan.
This is indeed a great time to invest in property for end-users and those who are looking to earn out of rent as their retirement plan. If you are at the age of 35 years and plan to retire by 55 years then this home could easily fetch you more rent than regular pension schemes available in the market. More on this will be shared in our next article on why to choose Home ( Subscribe to us for more such articles). Meanwhile, Recent Anarock survey on consumer sentiment shows some interesting outlook to this:
- 48% of respondents prefer residential real estate as the best investment option during Covid-19 largely due to lower risks attached.
- 54% of respondents consider ‘now’ to be an ideal time to buy a home as they have the opportunity to not just negotiate a good deal but also get home loans at all-time low-interest rates (7.15% — 7.8%).
- End-users continue to rule the Indian residential market with 59% of participants buying a property for self-use.
- Homeownership is a new priority for millennials; ~ 55% of property seekers aged between 25–35 years.
5. Living with your own fraternity
Dan Buettner’s study shows that living with friends increases your lifespan substantially. The most difficult years to survive on this planet is the year you are born owing to infant mortality and the year you retire.
If you are living with friends around then chances are high that you will live longer, healthier, and happier. Townsip business model is to bring people with similar lifestyles who have known each other for a long time, together.
After retirement, kids will be away and people look for a social life. We always think of money and savings but forget to think about how we would celebrate if no one is around to share our happiness and share our sorrows. We at Townsip, strongly recommend buying a home with your closed group, preferably with people who have stayed with you in your job. Friends from the same job/firm with comparable economic, educational, and lifestyle choices are more likely to enjoy each other’s company than people who are completely unrelated.
The adult population of today faces a persistent issue worrying about the well being of their elderly parents. Most of the younger generation does not live with their parents due to their jobs. This worry increases multi-fold in times like COVID19. With no option to even travel in times of need, the realisation of the importance of parents living in a known society with their former colleagues, friends have increased.
All the above-mentioned points indicate that living in independent houses with your friends and colleagues can have multifold positive effects on one’s life.
Townsip highly recommends its users to buy properties that are with you for your life.
If you like this article then, You may find our this article (4 mins read) useful too: https://medium.com/@townsip/buying-a-first-home-not-an-investment-but-a-financial-discipline-aa88a5c43a56