Work-from-home is changing homebuying preferences; should you take the plunge?

Work-from-home (WFH) is the new reality. The fear of the spread of Covid-19 and the need to maintain social distance until the final victory over the pandemic has forced the workforce worldwide to get accustomed to working from home instead of being physically present in designated offices.
In fact, WFH as a trend is likely to remain a permanent feature for many corporate and business establishments from here on and is sparking alternation in home-buying preferences in India. Real estate experts say that WFH is not just altering the preference for location of property but is also making buyers consider larger homes in the outskirts of major cities or in smaller towns.

“The pandemic has altered the course for the real estate market in India. Companies are offering a permanent extension to the WFH’ option to their employees. This may boost demand for real estate not only in metros but also in small cities and towns. The workforce is preferring to move back to their place of origin which may be cheaper and offer a better standard of living than in metro and Tier-I cities,” Nish Bhatt, Founder & CEO, Millwood Kane International said.

Moving to the peripheries

The shift in home-buying patterns is happening slowly but surely. According to ANAROCK Research, of the nearly 1.49 lakh units launched in top 7 cities in FY21, 58% were in the city peripheries. In pre-COVID-19 (FY19), their share was 51%. “WFH has now become the next fulcrum for home-buying decisions. In the pre-Covid era, the need to live closer to workplaces around CBD areas (where prices were quite high) prompted many to opt for compact configurations. Amid work-from-home, many new and old homebuyers are moving to the periphery for bigger homes in non-central locations – at more affordable prices. This new demand dictated fresh supply,” Anuj Puri, Chairman, ANAROCK Property Consultants said.

Gated communities and land are also being preferred by many. “Many prospective homebuyers now prefer to live in self-sustained gated communities where their entire family’s needs are sufficiently met. These housing societies offer companionship, a safe and secure environment, while providing amenities that reduce the need to venture out.  Notably, top cities like Bengaluru, Hyderabad, Chennai, Pune and Gurugram are seeing growing demand for plots post COVID-19. Many are looking to buy land as a long-term investment,” Puri said.

Sparking price correction

Deepak Khandelwal, Principal Partner, Square Yards agrees. “Homebuyers are seeing much sense in shifting to cost-effective and affordable homes in less central areas that offer generous open spaces. This trend has resulted in a spike in demand for homes in the suburbs. It has also resulted in a significant correction in real estate prices, especially in IT hubs like Bengaluru, Gurgaon and Chennai,” Khandelwal said.

He pointed out that WFH is sparking a craving for more space among homebuyers. “With working professionals having struggled due to the lack of dedicated and independent workspaces in their homes, the demand for mid segment homes have increased. There is a growing demand for 2.5BHK and 3.5 BHK homes, so that the extra space can be converted into makeshift workplaces. People who were previously comfortable living in rented accommodations are now joining the property bandwagon and seeking out spacious homes in gated communities having biophilic designs,” Khandelwal said.

Should you take the plunge?

While these are some of the best times for home buyers given the low home loan rate and prices too in favourable zone, you must assess the location and the infrastructure and facilities on offer such as schools and hospitals. Also you should assess your repayment capacity and select a property accordingly so that the borrowing remains within your abilities. Also the home purchase should be a part of your overall financial plan and should not derail your other goals.