It’s been over 3 years since the world faced lockdown measures on account of COVID-19. In early 2021, many believed that Work from office will resume as it was prior to COVID-19. As the world adapts to the post-COVID era, the hybrid workplace strategy has become the new normal for many companies. The implications of this new work culture are significant, particularly for the residential sector in India.
Top Three Impacts of the Hybrid Workplace on the residential market:
1. Higher residential demand in proximity to office locations
Most of the IT/ITeS companies are working on a hybrid model. The hybrid model allows companies to employ more people on a SqFt basis. The need of permanent workstations has been replaced by flexible workstations owing to the fact that employees attend office only for 2 – 3 days in a week.
This is pushing demand of residential unit in proximity to office clusters by 20%- 30% more. In established office locations of the city, land is unavailable and therefore prices and rents in these locations are rising at steep levels.
In Bangalore, demand for residential is very high in regions of Marathahalli, Sarjapur Road, Whitefield and others. These locations have limited good land parcels and therefore pricing is rising more than average price rise in the city.
2. Higher demand for low rise developments – Villas, Row Houses & Plotted developments
Working people are aware now that they don’t need to travel to workplace daily, therefore, they are opting for low rise developments located in 8 – 12 kms from workplace. Demand for villas, row houses and plotted development in peripheral regions are on the rise.
Mostly, senior management people or double income couples aged 40 and above are investing in this type of asset. They are buying villas and row houses for self-use. However, reasons for investments in plotted development is mixed – self-use and investment.
3. Increased residential unit sizes
Work From Home (WFH) has increased the demand for larger homes. As per our research, unit sizes have increased by 15% to 20% compared to pre COVID-19 period. Before, 2020, dominant demand was for 2 BHK unit but it is 3 BHKs are preferred more.
It is important to note #2 and #3 is also fueled by higher affordability of the target segment. Knowledge economy performed very well post 2020, resulting in increased demand for residential demand.
The hybrid work culture has other impacts on the residential market, including working spaces in clubhouses and an increase in demand for second homes in tourist locations for flexi workers. These trends are likely to stay as the flexible workplace becomes the new normal for the knowledge industry. This trend is likely to grow stronger in the coming years with the advancement of technology and security features for data and tracking mechanisms.
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