Homebuyers are now finding themselves staring at a critical question: Whether to opt for a property within the city or the suburbs?
The pandemic has redefined the concept of a ‘home’ for homebuyers across India. From being a place where family members gathered at the end of the day, it is now serving multiple roles including workspace, conference room, study room, fitness center, and recreational zone.
The checklists and priorities of homebuyers and tenants, as a result, have evolved in keeping with this change. They want more spacious living spaces with convenient access to essential amenities and services, such as groceries and healthcare. A clean, green surrounding has also emerged as a priority for both buyers and tenants as they are spending most of their time at home. Affordability has always been a priority for prospective home-seekers.
Against the backdrop of the second wave of the viral outbreak, homebuyers are now finding themselves staring at a critical question: whether to opt for a property within the city or the suburbs? Here’s looking at top factors that are influencing the decisions of homebuyers in the favor of suburbs and the subsequent sector-wide transformation.
Bigger Homes for Smaller Price
City centers have been the option of choice for home-seekers over the years as they prefer to live as close as possible to their workplaces to minimize the time to commute. The viral outbreak has changed this dynamic. 451 Research recently revealed that nearly 64% of organizations implemented expanded and long-term remote work policies in the post-2020 landscape. Not only this, 67% of the organizations that implemented remote work policies believe that this transformation is unlikely to reverse in the foreseeable future. As a result of this development, daily commutes are no longer a factor in the decision-making process of prospective homebuyers today. This means that they can be, and indeed are, on a lookout for property in a well-developed suburban locality.
NoBroker.com data has revealed that millennials are eyeing city suburbs to purchase a residential property. The daily commutes not being a primary concern for professionals anymore and with most companies adopting a hybrid model going forward coupled with affordability of real estate in suburban regions, is bound to stimulate real estate growth in and around these areas while improving connectivity, accessibility, and livability in suburban regions. In a recent survey conducted with over 100 builders, over 60% said that they observed greater demand by homebuyers in suburban regions.
Clean, green, open spaces
Most cities offer limited properties that meet the new-age requirements of homebuyers at an affordable price. Developers have quickly caught on to buyers’ changing aspirations and are now working to create properties that cater to their preferences. The rise of micro homes in metropolitan centers such as Mumbai, Bangalore, Chennai, etc. is a key emerging trend in India in keeping with this growing need-gap. Compact homes present an ideal residential option for singles, young couples, and small families who are looking to secure a range of modern amenities and luxuries at a prime location.
However, in the wake of the pandemic, more and more homebuyers are looking for more spacious homes, with clean surroundings and green covers. The limited availability of such properties in cities within an affordable price range is pushing them to look for a home in the suburbs as these regions are better suited for spacious developments and are often naturally endowed with lush, green covers. Away from the hustle and bustle of cities, they offer a quieter and cleaner environment to potential property owners with decent connectivity to cater to the essential needs of their residents.
The post-lockdown era has thrown the importance of a spacious household with separate rooms to accommodate multiple family members’ working or studying requirements from home into sharper relief. At the same time, families have also realized the importance of relaxation spaces such as gardens, access to parks, etc. as a crucial requirement for ensuring one’s mental, emotional, and psychological well-being. Therefore, the availability of such spaces, coupled with affordability, is leading prospective homebuyers to lean in favor of living in the suburbs.
Return on Investment
Cities are traditionally home to higher-priced properties and earn greater rental incomes for property owners. This is unlikely to change as the Indian economy expands and an increasing number of skilled professionals settle in cities. On the other hand, while suburbs currently offer a multitude of affordable properties for end-use and investment, these properties are likely to witness a massive price appreciation over the next couple of years. In view of this, a homebuyer’s decision will hinge on where they can secure better value for their money.
Currently, suburban areas present greater opportunities for the development of affordable homes. Buoyed by the government’s ‘Housing for All’ initiative,’ the affordable housing segment in India has registered a significant spike in demand and supply. While the project aims to meet its objectives by next year, the government will likely continue to make the purchase and construction of affordable homes lucrative beyond 2022. At the same time, builders and developers are stepping up to tap into the shift in consumer preference towards homeownership in the wake of the pandemic. Besides developing spacious and affordable units in the suburbs, builders are offering strategic discounts on property purchase to energize investor activity. According to a recent builders’ survey by NoBroker.com, over 75% of the surveyed builders admitted to extending discount on property prices, while 87% of those reported that the discounts translated into sales.
The uncertainty caused by the pandemic’s second wave currently raging across the country has pushed any expectation of a return to normalcy further by at least a couple of years. Given the ongoing situation in the country, it is highly unlikely that offices will reopen until the inoculation drive has covered every last Indian under its fold. And by the time the vaccination drive is complete, the connectivity between cities and suburbs will hopefully improve. In any case, all existing and emerging trends point toward the continued relevance of the remotely enabled workplace along with the rise of hybrid work culture. Against this backdrop, it is safe to say that homebuyers can confidently choose to invest and settle in the suburbs as real estate dynamics are bound to change in a few years.
(By Saurabh Garg, Co-Founder & CBO, NoBroker.com)