Apartment-based living is a concept not too old in India. This community concept started to find takers in the country’s mega cities during the time of liberalization, when more and more people started to flock to employment hubs in order to look for jobs, consequently pushing the demand for homes in mega cities where space was limited and already came at a premium.
Over the past one decade, we have seen apartment-based living becoming the most popular choice among buyers for a variety of reasons— it is more affordable, it offers safety and security and a feeling of community not easily available in independent homes. Not to mention the availability of common amenities like power backup, car parking, clubhouse, gym, swimming pool, garden area, etc.
Because of its many unique attributes, apartment-based living is going to remain the most popular mode of living among urban Indians; however the Coronavirus pandemic has brought about some changes in the way buyers now view property ownership.
Drivers for demand uptick
Even though space scarcity makes availability of plots neither viable nor affordable in most mega cities, the pandemic has prompted homebuyers to look towards city suburbs to look for those. Since the pandemic made it necessary for people to expect more from their homes—they are now also expected to be the perfect workplace as well as a work out gym — there has been a surge in the demand for plot-based developments. With companies launching full-time remote working policies or hybrid working models, India’s working population now also has the option to work from any location. Due to this factor, one is seeing a tremendous rise in demand for plots and plot-based housing projects in Tier-2 cities as well.
During the multiple lockdowns in India when people were forced to survive within the confines of their homes, the concept of home-ownership underwent a sea change. In a very short span of time, home ownership that was seen as an asset-heavy concept and was fast losing out to asset-light renting and co-living models, came back into the spot-light. Expecting more from your homes means having more space for your other activities. These physical necessities led to the boost in demand for plots in India.
Key Markets
Needless to state that big cities have very little space to spare for plots. However, emerging areas around these cities will see demand for plots increase further, consequently pushing land values in these areas. Most of the advantage of this spike in demand would be seen in Tier-2 and Tier-3 cities, where price values are still affordable and plenty of land is still available.
This is why we have seen many developers launching new plot based projects in either city peripheries or locations that are waiting for the arrival of mega infrastructure projects like airports and metro lines. The Jewar airport project in Greater Noida is a case in point. The same is true of similar peripheral locations around Hyderabad, Chennai, Gurgaon and Ahmedabad.
Price trends
Historically, plots invariably clock higher returns than other residential assets. That is going to remain true for them in future as well. Unlike apartment-based projects, the chances of value appreciation is much higher in case of plots due to the fact that there are limited depreciation risks. Positive consumer sentiment and policy support is expected to fuel the demand for plots in the coming years, consequently pushing up their values.