Impact on Commercial Market
- There was a decline in demand for commercial spaces
- There is a rise in demand for co-working spaces
- There is a rise in demand for spacious & open commercial spaces, considering physical-distancing
- There is a boost in subleasing powered by companies with longer-term leases
Impact on Vacation Homes
Work from home (WFH) gave rise to another concept known as ‘workation’. Many organisations introduced the workation concept which empowers professionals to mix business with leisure.
Workation turned the tables for the market for vacation homes. The growing number of the middle-class, higher middle class, NRIs and HNIs began exploring vacation homes in their country, within driving distance of metros – in smaller towns and nearby holiday destinations such as Nasik, Lonawala, Alibaug, Karjat, Goa, Panchkula, Kasauli, Shimla and Dehradun among others.
Workation was a win-win situation for employers, employees & the real-estate market. As for the employers & employees, workation facilitates living and working from vacation homes for long durations, without compromising on work or family life.
For the real-estate players, the sale of vacation homes & in turn profitability went up. Striking while the iron is hot – developers started offering competitive prices. This fuelled by low-interest rates on home loans by financial institutions, second-home & vacation home became the preferred choice of investment for travel-savvy professionals who earlier enjoyed annual holidays.
Impact on Residential Market
Work from home (WFH) has overshadowed the previous ‘gold standard of Indian housing – the walk-to-work/short drive to work. This has led to future homebuyers shifting to the peripheral areas in search of bigger homes and a better lifestyle – at more affordable prices.
Understanding that the work from home (WFH) is here to stay, the millennial generation – who are the future homebuyers have a new-found preference for buying rather than renting homes.
They are now preferring to live in more spacious and cost-effective homes in less central areas. This new demand has dictated fresh supply.
Affordability and Price Quotient
Apart from changing real estate consumer preferences due to work from home, affordability has played an important factor in the shifting & rising demand towards residential property purchase in peripheral areas such as Thane & Mulund.
The cost analysis of real estate in MMR is as follows:
In MMR (Mumbai Metropolitan Region), the average price for a standard 1,000 sq. ft. property in areas within city limits is approx. Rs 1.85 Crore, against Rs 55.35 lakh in the peripheral areas – a 70 per cent cost difference. Micro-markets within city limits included Andheri, Vile Parle, Goregaon, Malad, Kandivali, Chembur, Wadala, Ghatkopar, Vikhroli, Powai, Mulund, etc. Peripheral areas include Kalyan, Bhiwandi, Dombivli, Mira Road, Vasai, Virar, Thane beyond Kasarvadavali and Owale Panvel, Ulwe, Taloja, etc.
The average monthly rent for a standard 2 BHK home in areas within city limits is approx. Rs 45,800, against Rs 12,500 in the peripheries.