Real Estate

Covid-19 effect: Work from home to shift residential housing to peripheral areas

Anil Urs Bengaluru | Updated on June 09, 2020 Published on June 08, 2020

The work-from-home concept may become the next fulcrum for home buying decisions   -  istock.com/mapodile

Covid-19-induced Work From Home (WFH) is expected to take residential housing to the next level, as future home buyers will look to shift to peripheral areas for bigger homes, and a better lifestyle at more affordable prices.

The earlier concept of residential housing, which revolved around 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.

“The Work From Home concept may become the next fulcrum for home-buying decisions, where the walk-to-work option had held the longest sway,” said Anuj Puri, Chairman, Anarock Property Consultants.

He further said, “This, and millennials’ new-found preference for buying rather than renting homes, are 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 peripheries, this new demand will eventually also dictate fresh supply. Bigger homes, affordable prices and more generous open spaces in the peripheral areas will draw demand from tenants and buyers alike.”

“Location, amenities and facilities matter,” said Mahesh Khaitan, Director, Salarpuria Sattva Group, and goes out to explain that the “key aspect that is often kept aside by homebuyers is the ambience offered with a residential project. With evolving urbanisation and the menace of traffic, finding tranquillity has become difficult. In situations like these, it is important to nestle in a setting, which provides a holistic approach for basic living with garden landscape, community halls, walking pathways, toddlers and play area, guest parking, sports pavilion, and unwinding spaces, among others, a long with other seamless connectivity facilities, as per the emerging urban requirements.”

As for the financing of residential units, JC Sharma, Vice Chairman & Managing Director, Sobha Limited, said, “RBI by reducing the repo rate by 40 basis points to 4 per cent and reverse repo by as much to 3.35 per cent from 3.75 per cent, will further lower the home loan rates. Such lowest-ever, most lucrative reduced EMIs will augur well for the market sentiments and the larger economy. This will induce demand for homes and will give the much-needed fillip to the current state of the economy.”

Central vs peripheral areas

Apart from changing 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 rental and purchase perspectives. A study by Anarock shows the cost difference for India’s three largest economic dynamos ― MMR, NCR and Bengaluru.

Bengaluru

In Bengaluru, the average price for a standard 1,000 sq ft property in areas within city limits is approx ₹69.80 lakh, against ₹43.50 lakh in the peripheral areas ― a 38 per cent cost difference. Micro-markets within city limits include Sarjapur Road, HSR Layout, Kudlu Gate, Singasandra, Hebbal, Jakkur, Yeswanthpur, Jalahalli, Whitefield, Marathahalli, KR Puram, JP Nagar, BTM, Jayanagar, Banashankari, Kodigehalli, etc. Peripheral areas include Attibele, Electronic City, Yelahanka, Doddaballapura Road, Varthur, Budigere Cross, Kanakapura Road, Tumkur Road, Mysore Road, Kogilu Cross and International Airport Road (Bellary Road). Average monthly rental for a standard 2BHK house in areas within city limits is approximately ₹18,500, against ₹9,500 in the peripheries.

Mumbai Metropolitan Region (MMR)

In MMR, the average price for a standard 1,000 sq ft property in areas within city limits is approx ₹1.85 crore, against ₹55.35 lakh in the peripheral areas ― a 70 per cent cost difference. Micro-markets within city limits include Andheri, Vile Parle, Goregaon, Malad, Kandivali, Chembur, Wadala, Ghatkopar, Vikhroli, Powai, and Mulund, among others. Peripheral areas include Kalyan, Bhiwandi, Dombivli, Mira Road, Vasai, Virar, Thane beyond Kasarvadavali and Owale Panvel, Ulwe, and Taloja, among others. Average monthly rental for a standard 2BHK house in areas within city limits is approximately ₹45,800, against ₹12,500 in the peripheries.

National Capital Region

In NCR, the average price for a standard 1,000 sq ft property in areas within city limits is approx ₹88.20 lakh, against ₹37.50 lakh in the peripheral areas ― a 57 per cent cost difference. Micro-markets within city limits include Vaishali, Vasundhara, Indirapuram, Noida, Golf Course Ext. Road, Sushant Lok, Dwarka Expressway, New Gurgaon, and Dwarka, among others. Peripheral areas include Ghaziabad-Rajnagar Extension, Faridabad, Greater Noida, Sohna, Bhiwadi, and Bahadurgarh, among othersetc. Average monthly rental for a standard 2BHK house in areas within city limits is approximately ₹22,000, against ₹9,500 in the peripheries.

Published on June 08, 2020
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