The coronavirus pandemic, which nearly destroyed the embryonic real estate sector, produced several new trends, notably work-from-home (WFH),which has brought the real estate sector a mixed bag of success. Following the coronavirus outbreak, a long-drawn pan-India lockdown in June saw offices closed and employees forced to work from home. Even though some offices reopened in September, social distance rules and other health and safety regulations ensured that personnel strength in offices was limited. During the pandemic, this trend made it easier to work from the comfort of one's own home, but it also hurt office space absorption.
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According to one of India's top real estate platforms, the COVID-19 epidemic may have had the greatest impact in the second quarter of 2020. Office real estate fell by 27 percent to 17.3 million square feet in H1 2020, with NCR and Pune falling by 86 percent and 87 percent, respectively. Year on year (YoY),office lease fell by 37% to 17.2 million square feet.
Co-working facilities with open seating layouts that assured maximum space use were also hit hard. According to a recent estimate, demand for flexible spaces in 2020 is predicted to fall by up to 60% year on year. In the future, too many small and mid-sized players may be forced to close their doors. This could force some coworking spaces to close their doors.
In the case of residential real estate, WFH had a detrimental short-term impact. WFH, along with other variables, contributed to the drop in home sales. According to another significant real estate platform, home sales in the top seven cities fell by 49% in H1 2020 compared to H2 2019. Sales in the second quarter of 2020 were down 81% from the second quarter of 2019. Between January and September, 87,460 units were sold, compared to about 2.02 lakh units sold the previous year. They are willing to relocate to the city's outskirts in search of larger yet more inexpensive lifestyle residences. Purchasing homes in outlying areas might result in savings of 35-60%.
Even the rental difference is significant. This cost arbitrage has increased housing demand in the city periphery and tier 2, 3 cities. Developers report a surge in demand for 2.5 BHK and 3.5 BHK homes with excess space that may be transformed into makeshift workspaces. Since WFH is a reality and here to stay, there is also an increased demand for useful flexible spaces that can accommodate work areas.
Following Corona, consumer demand has shifted significantly with new preferences, necessitating the need for developers to invest in design transformation and efficient layouts. To achieve WFH wellness requirements, there is an increasing demand for flexible rooms supplemented with smart modular furniture, adequate open space, and good ventilation.
To accommodate the demand generated by WFH, several developers have also included business centers within apartment complexes. Demand for equipment such as small study tables, bookshelves, ergonomic chairs, and storage cabinets is also increasing in home offices.
The desire for plotted projects is increasing as self-owned dwellings such as villas, row houses, and separate floors provide better social distancing. In the previous four months, DLF has sold 88 independent floors worth Rs 300 crore in Gurgaon. To capitalize on this trend, developers are selling even smaller plots ranging from 1500 to 2000 square feet.
Interestingly, luxury housing, which has taken a beating in the last two to three years, is gaining traction as homebuyers want larger properties. Workcation is a new concept that has increased the demand for vacation homes and homestays.
