As migration to cities continues at a brisk pace, urbanisation is also gaining rapid momentum. It is estimated that 590 million people will live in cities in India by 2030. This is more than double the 290-million mark in 2001, as per McKinsey Global Institute (MGI) research.
So, while the demand for affordable homes will remain strong going forward too, we are also witnessing that there is a strong percentage of the population in India who fall into the upwardly mobile segment. The characteristics of this segment broadly can be laid down as follows:
- Young professionals who are well-travelled
- Age group from 25-45 years (dominant age group still being 30-45 years)
- Socially quite active and thus exposed to lifestyle living
- Strong aspirations
The above set of customers are thus exposed to lifestyle living, and what they look forward to is to own one that fits into their budget. Indian markets were, are, and will always be price sensitive and customers will always look forward to a scenario of ‘more for less’ and that’s exactly the kind of segment to which aspirational housing caters to.
The recent buoyancy in the real estate segment, especially as we emerge out of the COVID-19 scenario, is clearly driven by more end-users looking forward to owning their first home and/or upgrading their home since the trend of hybrid working culture seems to be here to stay. This technically means that if one doesn’t need to travel that much for work, then one might as well live in an area which is well-connected to the city centre or workplace, socially well-developed, offers a larger circulation area inside the residence, and is packed with most of the amenities that one feels proud of, not necessarily ones which are used regularly.
As per realty experts, there has been a significant uptick in demand among homebuyers in the age group of 26 to 40 years who are eyeing buying or investing in residential properties in the aspirational range.
So, what classifies an aspirational home, which factors are responsible for driving this demand, and how would the future outlook be? Let’s deep dive to answer a few of these pertinent questions from the point of view of the realty sector, which is experiencing an upward swing.
Comfort and Convenience Underscored
Aspirational homes are known to offer the comfort and convenience of a contemporary residence while promoting aesthetics, lifestyle, sustainability and more.
In fact, several features and amenities that were earlier classified as luxury now come in the ambit of plain necessities. In all this, the aspiration for a luxurious and healthy lifestyle remains at the heart of new-age homebuyers. There is more inclination towards theme-based compact spaces, which underscore comfort and contemporary lifestyle living.
A home buyer is aspiring for modern amenities, which include both external and internal components of a particular residential property. For example, or external form and functions dedicated to spacious entertainment, which includes a well-equipped gymnasium, clubhouse, multipurpose party hall, swimming pool, amphitheatre, and so on, are a given in these aspirational home properties.
Innovative and inspirational in their organic design, aspirational residences extend the joys of gated community homes, which are known to highlight form and functionality along with comfort.
Along with all these elements, when punctuated with that right aspect of landscaping, such projects are known to make the ultimate difference between a motley cluster of brick-and-mortar structures and living spaces that are known to extend enriching experiences, integrate communities and elevate lifestyle.
Further, these residential projects are known to offer much more. Take, for instance, a reflexology park, an organic farm, and star-gazing sundecks, just to list a few, are some of the features extended by these aspirational homes. These modern residential spaces are known to offer a living experience that is beyond just the convenience of location.
In a realty market that remains price-sensitive, developers are able to match the aspirational price while striking a fine balance between the two, that is development and price. Such developments are likely to do extremely well in the long run.
Growth Drivers in the Aspirational Home Segment
The next gen of homebuyers have started investing in or buying a residential property with workspaces, and this trend is quite likely to continue in at least mid-term if not foreseeable long term, as well. Although it started as a necessity during the phase of the pandemic, this has now become a part of the lifestyle, with more and more organisations considering remote or hybrid work options for their employees. The hybrid work culture leads to the necessity of requiring more circulation space inside the apartment since more time would be spent inside one’s home along with lifestyle amenities. This to my mind is the primary growth driver.
The ability to operate home offices continues to remain a significant draw for millennials and generation-Z (Gen-Z), who have been required to work flexibly or entirely from home.
In the last couple of decades, income levels have risen significantly which has improved the affordability quotient of the upwardly mobile segment. In addition, exposure to lifestyle experience—in-person or through social media—has gained momentum among the next gen of homebuyers who are mostly well-travelled.
Landscaped gardens, wide-open spaces, recreational and health avenues, clubhouses, pools and parks, libraries, and amphitheatres – the list of amenities that the aspirational homes offer are quite exhaustive, and developers very much have their ears to the ground. This two-way confluence of demand and supply has elevated the real estate portfolio to a whole new level in not just tier-I but tier-II and III cities as well.
Today, youngsters in the age group of 23-25-year are applying for home loans. About a decade ago, this average was about 35-38 years.
As per a report, 2BHKs remain the most preferred BHK type for at least 42% of homebuyers, followed by individuals in favour of 3BHKs and 1BHK.
Moreover, buying a residential property extends substantial savings on income tax, offers high rental yields, and considering the strict implementations of the Real Estate (Regulation and Development) Act (RERA) and other policies, which ensures meeting timely delivery, real estate investments have emerged as safe and secure as compared to any other investments portfolios.
Future Growth Outlook
Millennials, who at 34% comprise one-third of the total population and 46% of the total workforce, have emerged as the largest single generation in the country.
As per a report, 53% of millennials and 35% of generation-Z (Gen-Z) respondents plan to use their investment gains for buying a home in the future.
The realty sector, which is known to contribute almost 6-7% of the economy, is set to spur to about 13% by 2025.
Without a doubt, real estate is a smart investment option, provided you, as a homebuyer, have a mid-to-long-term horizon in mind. In this regard, aspirational homes have emerged as a segment that remains worth considering as they tick all the right boxes when it comes to fulfilling aspirations as well as comfort and convenience in a lifestyle living experience.
(By Sriram Mahadevan, Managing Director, Joyville Shapoorji Housing Pvt Ltd)