Piyush Shukla, Sales Head of Svasa Homes, brings to the table his unique industry insights on how the residential real estate market is about to undergo a tectonic shift for both buyers and developers post Covid-19.
The Covid-19 pandemic has clearly left an indelible mark in every industry. A mark not just for the worse, but also probably for the better. The real estate industry is no exception. An unprecedented change has taken place that will transform and transcend the residential category forever. Developers will never build homes the way they used to. And buyers will never purchase homes like in the past. The industry is going through a lot of change as we speak. So, what does the future of homes look like? This is a question I’m asked quite often.
Covid-19 brought in a very pronounced impact on the industry. Many experts said that this is the worst time in the history of real estate. For an industry that was already reeling under a lot of pressure owing to multiple fundamental reforms, parched funding and stock oversupply, Covid-19 was the final nail in the coffin. Prices have dropped at many places, transactions are at an all-time low and multiple projects are stuck with no immediate resolution in sight. There are reports on how sales numbers of various reputed developers have fallen drastically compared to the same time last year. It looks like a dismal scenario. I politely beg to differ!
Whenever there is a fundamental change of this magnitude, people who are aligned to the new reality at the earliest are the ones who eventually emerge as leaders of the new world. Think of the Covid-19 pandemic as a major reset button that somebody just pressed. The world is no longer what it used to be. The markets are not going to go back to what they used to be. Instead, a whole new reality will take shape from here on across industries right in front of our eyes. The sooner we adapt, the sooner we sync up with what people are thinking, what they’re feeling, and the sooner we align our ways in that direction, and the better we will be in the new world. The same holds true for the real estate industry. If you observe the industry very carefully, you will begin to witness trends that are emerging for the first time.
The Value of Having Your Home as an Anchor
A big shift today is the change in the psyche of the buyer with respect to a home. The value of a home as an anchor in one’s life, the value of a home as a provider of emotional security, physical security and financial security has really become a lot more profound than ever before. When the markets are good people like to play. They want to be investing their money and are more concerned about returns. They are more concerned about the growth rate and how soon their money is doubling. We tend to generally give less importance to how we are, how happy we are, how grounded we are, and if we’re giving enough time to our families. In short, things that ideally should matter most often take a backseat. With the lockdown, as all outside activity came to a sudden halt, families were forced to face the limitations in their personal lives. So, there has been a major revelation for people in terms of the limitations of their current homes and family dynamics. After all, “Home is where the heart is”.
Our home acts as a platform in our lives – a platform on which we enact this marvelous play called life. No great play has ever been performed without a stable platform supporting it from underneath. Especially in this part of the world, owning and passing on a home has been supported and encouraged traditionally too. A home has always been seen as a legacy to pass on. It carries with it the love, blessings and goodwill of our ancestors. These tough times that we are facing today, only reaffirm the wisdom of our rich culture. A home is indeed a safe haven. The import of this wisdom has hit home with many.
Be it in terms of functionality of a home or in terms of the happiness quotient of the family in general, being at home for months made everyone realise that family and home matter most at the end of the day. More than anything else, there is a need for homes where families are happy. A home that’s not just nice and spacious, but also has on offer a good community. A place that is well maintained and cared for. A conglomeration and a celebration of like-minded individuals. The individual forms the community and in turn the community forms an individual. If uncertainty strikes us in life, like how it did, our inner circle of neighbours, family and close friends are going to be there for us. People have realised the importance of being surrounded by well-wishers. Buyers have really become a lot more conscious about the kind of community they want to be a part of. The qualitative aspect of owning a home is really in focus today. Compromising on aspirational living is a thing of the past. Many homebuyers earlier used to compromise on these things. They used to subdue their living standards a little and invest money in other avenues for gain. But not anymore. Living well is emerging as a very prominent theme.
The industry has reported an upsurge in quality enquiries. Channel partners have reported that the inquiries they are getting are genuine inquiries from people who are really interested in buying quality homes. No one is willing to step out during the pandemic to hunt for a house unless they are serious about it. House hunting was a kind of a pastime for many people, “Hey, let’s go check out this project. Let’s go check out that project. Let’s go to the mall on the way, eat, and come back.” All such window-shopping behaviour has stopped. Now, you have genuine buyers, and they know what they are looking for. What has happened? Why this change?
Probably because buyers have realised the value of a good home. So, this, I believe, has been a fundamental shift in the consciousness of a homebuyer. Homebuying is going to be driven a lot more by emotions. Today’s homebuyer is exceptionally self-aware of his needs. Earlier, it used to be a ‘mind over heart’ decision. But now we are seeing people buying properties that speak to them and resonate with their aspirations.
The Merging of Home and Office
We used to live dualistic lives. For most of us work was separate from family and there was a clear distinction in both these aspects of our lives. The pandemic has changed this forever. The boundary has dissolved and both the worlds have merged as one. Though most of us faced adjustment issues initially, but slowly we have come to terms with it and have even begun to thrive. It is surprising how adaptable and strong the human spirit is!
Many companies have reported 100% productivity levels and work efficiency, even with their employees working from home. In fact, some companies have even announced work-from-home option on a permanent basis. And why not? If productivity remains the same, and we save so much precious commute time, it is a good deal by all means. People get more hours to add to their lives, there are lesser vehicles on the road thus lesser pressure on infrastructure. Lesser pollution levels!
Many companies have announced one-time allowances to their employees for setting up work desks at home. So one of the most important features that has evolved recently is the need for having a dedicated workspace at home. I personally struggled with that. I had to quickly make space for work from home, and I’m sure many people did the same. But guess what? Making up space for work naturally takes away from another usable space at home. For most of us, it is our guest bedroom. A makeshift arrangement after all isn’t a long-term solution. Also, this is something important even for the kids, futuristically speaking. Education is also changing, as we speak. A good part of the curriculum might be conducted online, so there needs to be a space for work and study for the whole family. A space dedicated for concentration and contemplation. The need of the hour is to have thoughtfully-designed and dedicated spaces for work and study, whether they are common serviced shared spaces like how we have at Svasa Homes, or it is a dedicated small space that you have within your house, it is a must. Luckily for us at Svasa Homes, we already have ample inspiring workspaces in place. What we envisaged as luxury earlier has now become a necessity.
Breaking the Location Barrier
Like how the moon revolves around the earth, the search for a home used to revolve around proximity to one’s place of work. So strong was the fixation and the need to be close to work that residential micro-markets developed around office parks. Primary driver of growth was commercial activity, followed by development of residential catchments around it. If we look at Bangalore then Electronic City, Outer Ring Road, Whitefield, Sarjapur Road and Hebbal micro-markets are good examples of this trend.
Owing to this, buyers often used to compromise on what they liked as a product and settled for what worked for them in terms of locational convenience. Real estate has primarily been a location centric proposition, until now. A homebuyer’s radar of property search used to be largely limited within a fixed radius of their office. With work-from-home, the location barrier has broken! And it is a big fundamental shift. Now a buyer can choose a property anywhere in the city. They can go after what they love and desire and not be constrained by distance anymore.
At Svasa recently we’ve witnessed this phenomenon firsthand. We have received purchase interest from buyers whose offices are as far as Hebbal or Whitefield. Surprisingly they are very much open to buying with us and staying here at Basavanagudi, in the heart of the city. They have shown up because the product resonates deeply with them.
These are times that will witness the emergence of projects that are product-centric and self-sustainable. A good product will find itself naturally at a position of advantage. Even at an industry level, developers will become a lot more conscious of the design, functionality and value proposition of the product. We are entering an era of product-driven sales from an era of marketing-driven sales. This should bring about a much-needed change in the collective industry mindset.
The Beginning of Coming Together of Dispersed Families
The need to be there for each other in times of crisis is bringing families back together like never before. When the lockdown was announced suddenly and everyone was exposed to an imminent health risk, many families came to terms with the harsh reality and limitations of staying apart. It has been a period of emotional turmoil for many. Especially families where the older generation and the younger generation stayed apart. Elders had to fend for themselves in such trying times and youngsters who were away cringed at their inability to be there for the elders, though being terribly concerned about their wellbeing. There was mutual concern and longing.
This has led to another fundamental shift in the consumer psyche. Many NRIs are returning or are waiting to return to the country to be with their families here. Even within the country there has been considerable migration of people returning to their home states from states where they used to work.
This trend is being witnessed even within the city! We have a couple of customers where two generations of the family were happily settled in two different locations of the city. Post the pandemic, they have jointly decided to buy apartments in the project so that they can be around each other. Families and homes have never been in such focus before. We expect more such joint purchases to happen in the near future. We are witnessing the return of joint families.
Other Important Features Emerge for the Future
Homebuyers have also realised the importance of big balconies. Given the lockdown, the only place where we have found some peace is our balconies. A place where we could breathe and be one with nature. A place for the sun, rain and pure air.
Since Bangalore has such salubrious weather for most of the year, buyers typically have always preferred decent–sized balconies as compared to other markets in the country. Bangaloreans love to spend time on their balconies. So, I just see that this will become a sort of a prerequisite for any home in terms of design. You need to have spacious balconies. Maybe even private terraces in luxury projects.
Also, In my career span, I haven’t witnessed a time where buyers were more clear and aware of their needs as they are now. Being at home for months has triggered such realisations for many of them. Recently, we had a customer who is extremely sound sensitive. He sleeps for three to four hours a day. He’s a workaholic, but when he sleeps for those three to four hours, he doesn’t want any disturbance. So now that he’s looking for a home for himself, he goes in and checks the quality and sound resistance ability of windows and balcony doors. Do the windows allow sound to travel through or not? For the first time, these fine sensibilities of customers are coming to the surface.
There’s another instance of an entrepreneur who is looking for a home. She had shortlisted two properties – one far in North Bangalore and the other being us. The common thread in both the properties is their vicinity to nature and quietude. The property in North Bangalore is next to a lake and we at Svasa are located next to 15 Acres of tranquil greens. Her main requirement was a place next to nature which is quiet and will give her the necessary inspiration to build her next successful business. These are examples of very aware consumers. Residential real estate sector needs to up their game.
There will also be a pronounced need for apartments with amenities. God forbid, but if something like Covid happens again and you can’t go clubbing outside, you can’t go socialising, you can’t go gymming. At least your project should be self–sufficient where you have all recreational facilities available. Self sustained projects in all respects will be sought after.
Due to the lockdown there has been renewed focus on learning and upskilling. It is a very good use of one’s time. At Svasa Homes our clients really appreciate features like video conferencing room and the well-stocked double level library. It is such a joy to see people making good use of the space and immersing themselves in reading!
Is Now a Good Time to Buy?
I’m often asked if this is a good time to invest in a quality home. There’s a quote in real estate, “The best time to buy a home was yesterday!”
Often we postpone our sense of prosperity and wellbeing to a future date. That just doesn’t make sense. Also, times have proven that real estate in the long run is a very solid asset class. It is less prone to market fluctuations and steadily appreciates over time. No one can take it away from you. There is a reason it is called ‘Real’ Estate. What is the worst that can happen? Rent it, occupy it or pass it on as a gift of legacy.
Home loan interest rates today are hovering at around 7 percent, which makes home loans very affordable, historically speaking. This has happened only a few times before.
The need to buy a home is more pronounced than ever, home loans are more affordable than ever, and there are multiple product options to choose from today. Buyers are no longer bound by locational restrictions. Many developers are flexible with payment plans today. If this is not a good time to buy, when else will it be a good time?
So, yes, it is a very good time to buy a home because the good properties are going to get sold out soon. We have had multiple customer sentiment surveys done by various agencies recently which indicate that a very large majority of homebuyers today prefer to buy ready homes That makes ready–to–move–in houses a very limited commodity. So, go and grab one before they get sold. Identify what resonates with you and take the plunge, period.
We’re at the start of a fundamental shift. The sooner we relate to it, the better off we will be. Although the future won’t look anything like today, I’m certain developers and homebuyers will jointy reshape the residential landscape for the good. Where what matters most will prevail and everything else will perish. I welcome you to a new era.