Precipitated by the pandemic, the residential homebuying segment is undergoing a sharp change. Today, a home is not just a place to live but also to work, learn, and recreate.
Factors impacting the homebuying decision are now changing with attributes like access to green space, flexible design, environmentally sustainable development, etc assuming more importance.
In response to the shifting homebuying imperatives, the below three themes have emerged across geographies.
Optimized design for multiuse
Work from home, while initially adopted in response to the restrictions imposed by the pandemic, is now likely to become the way forward for many organisations. Companies like Boeing, Uber, Nielsen have announced an office footprint reduction.
As the role of homes evolves, factors considered for buying one have transformed. Particularly in India, we are observing a reversal in two key trends.
Firstly, millennials who had previously shied away from owning a house have now become strong advocates of homeownership. Pre-COVID, the millennials constituted about 49 percent of the buyers on NoBroker. The number has now jumped to 63 percent.
Secondly, the trend of shrinking houses is reversing. According to an industry report, the average apartment size in the top seven Indian cities has increased by 10 precent in 2020 versus 2019.
Furthermore, the shape of demand has changed. Homebuyers now prefer layouts that offer them more in terms of dedicated spaces to work, flexible designs, and a higher green outdoor-indoor ratio.
According to a survey published by JLL, over 90 percent of prospective homeowners in India’s top six tier 1 cities want a dedicated space for study/home office and access to green outdoor space.
In response to this shift in preferences, developers globally are imbibing the concepts of flexibility and livability at the design stage itself.
For instance, Lennar Corporation, a US-based developer, has introduced the concept of ‘The Home Within a Home’ that offers an independent suite within the house, which can be used as a private office, studio, or gym.
In India too developers are increasingly building ‘wellness communities’ that incorporate features like high-end gyms, spa resorts, reflexology pathways to ensure homeowners’ wellbeing.
Digital and Analytics Powered Sales
In response to the changing market dynamics, developers are increasingly embracing digital and investing in developing innovative methods of reaching consumers.
Due to the lockdowns imposed during the first half of 2020 and in the second wave in 2021, there was a significant drop in physical site visits leading to limited transactions in the residential space. Traditional marketing methods became ineffective, making it imperative for developers to establish a virtual presence and adopt tools that can help them map the entire consumer journey digitally.
For instance, VirtualApt, a US-based tech company, allows buyers to take a 360-degree video tour of not only the house but also its amenities and neighborhood.
Digital tools are tangibly elevating the consumer’s virtual experience.
Additionally, developers are also leveraging data analytics to curate consumer-specific marketing content. Geotargeting and analysing consumer trends through data consumption patterns has become a go-to practice for developers to generate leads.
Information Symmetry and Progress Visibility
Lastly, homebuyers are now increasingly demanding transparency in their real estate dealings and have shown a proclivity to engage with trusted developers who have a proven track record.
The government too has been undertaking policy initiatives to make the market more transparent. For instance, Karnataka RERA has mandated developers to submit quarterly progress reports for all the registered under-construction projects. This gives a very clear view to the homebuyers.
So, what does the future look like?
COVID-19 has significantly altered the housing demand, especially for people looking to adopt the work from home model for a long period or permanently.
The consumer now not only wants more in terms of amenities but is also more aware of market offerings. Therefore, the developers need to step up their game in terms of product offering and marketing strategy to impress the new-age homebuyer.
Author Neetu Vasanta is the managing director and partner at BCG while Gaurav Jindal is a partner and Yashi Tandon is a senior knowledge analyst at the firm. The views expressed are personal.
(Edited by : Kanishka Sarkar)
First Published: IST