Mumbai: The work-from-home (WFH) concept may become the next fulcrum for home buying decisions; a tad better than even the walk-towork option. The COVID-19 era presents a radically transformed real estate market, with new market realities determining the preferences. With WFH, a viable option even after the lockdown, many future homebuyers will gravitate to the peripheral areas for bigger homes and a better lifestyle - at more affordable prices.
A report of ANAROCK Property Consultants says the previous 'gold standard' of Indian housing - the walk-to-work / short drive to work, by definition only in and around central corporate workplace hubs - may shed some of its popularity for the middle class. Central locations would retain their allure only for HNI / C-suite buyers who can afford larger spaces there. In Mumbai Metropolitan Region (MMR), the average monthly rent for a standard 2BHK home in areas within city limits is about Rs 45,800, as against Rs 12,500 on the periphery. In five years, this aggregates to nearly INR 28.66 lakh (including standard rental escalation for this period). This is almost 52% of the total average cost of a property in MMR's peripheral areas. However, the average price for a standard 1,000 sq ft property in areas within city limits in MMR is Rs 1.85 crore, as against Rs 55.35 lakh in the peripheral areas – a 70% cost difference.
"This and the millennials' newfound preference for buying, rather than renting homes, is among the most prominent new residential real estate trends of the COVID-19 era. With the rise of the WFH culture, many may now prefer to live in more spacious and cost-effective homes in less central areas. While sufficient supply currently exists in most of the peripheral areas, this new demand will eventually also dictate fresh supply. Bigger homes, affordable prices and more generous open spaces in outskirts will draw demand from tenants and buyers alike," said Anuj Puri, Chairman ANAROCK Property Consultants.
Apart from changing the dynamics of real estate consumer preferences in a strengthening WFH environment, affordability is an enduring concern, especially in the backdrop of a faltering economy and job loss/uncertainty. The peripheral areas are more affordable both from a rental and purchase perspective. In NCR, the average monthly rental outgo in city-limit areas is Rs22,000. For five years, this equals to nearly Rs 13.77 lakh (including standard rental escalation for the period). It is 37% of the total average cost of a property in NCR’s peripheral areas.
In Bengaluru, the average monthly rental outgo in city-limit areas is Rs18,500. For five years, this equals to Rs11.57 lakh (including standard rental escalation for this period). This is almost 27% of the total average cost of a property in the peripheral areas