Peripheral areas are the latest preferred realty destinations in cities

6/17/2021 10:10:00 AM

The pandemic has changed consumer behaviour in the real estate business with the city peripheral areas now emerging as the topmost choice for homebuyers as well as developers. The pattern emerging over the last 12-15 months clearly reveals that the supply is chasing demand. As much as 58% of around 149,000 homes launched in 2020-21 are located in the peripheral areas of the top seven property markets, showed data from Anarock Research. The proportion of these launches in peripheral areas has been rising since the past two years but the pandemic has exacerbated the change. In 2018-19, the share of new launches in the peripheral locations was around 51% of about 229,000 homes launched in these cities. In 2019-20, over 207,000 new units hit these markets and the peripheral areas accounted for a 53% share. “Homebuyer preferences changed perceptibly post the pandemic,” said Anuj Puri, chairman, Anarock Property Consultants. “The previous ‘walk-to-work’ concept no longer leads home buying decisions. Instead, bigger and more affordable properties in greener, less polluted areas found favour, driven by work-from-home and e-schooling compulsions as well as safety concerns.” “Developers have quickly changed track and those with land banks in the peripheries, and even otherwise, saw it an opportune time to launch new projects there,” Puri added. The sales pattern also reveal a rising demand in such locations as around 54% of over 151,000 units sold across the top seven cities in 2020-21 were in the peripheral areas. “The conversion of demand into actual sales due to location and affordable price point has been encouraging,” said Ashok Chhajer, chairman at Arihant Superstructures, which focuses on the affordable housing in Navi Mumbai, Mumbai Metropolitan Region (MMR) and Jodhpur region. “We have sold apartments worth over Rs 125 crore across our 10 ongoing projects and two new launches during the second wave of Covid-19 in the last two months as homebuyers now prefer gated communities.” The listed company has sold over 260 apartments during this period and around 106 houses out of total sales were achieved through digital launches of its projects. Among the top cities, Pune saw the most launches in its peripheral areas—76% of 29,950 units launched in 2020-21, led by Mulshi, Pirangut, Daund, Chakan, Chikhali, Kamshet, and Undri. During this period, MMR had 67%, while Delhi-NCR, Chennai, Bengaluru and Hyderabad saw 45%-57% supply coming from such peripheral locations. Not surprisingly, new supply housing in these cities’ key peripheral micromarkets rose markedly between April 2020 to March 2021. According to Puri, it is very likely that some of the major office occupiers will soon de-centralize and bring their offices closer to their employees’ homes in these peripheries. New developments in the peripheries reduce the stress on the choked citycentres, and they become increasingly viable with ongoing infrastructure projects such as metros and ring roads, which will boost their connectivity to the city centres. Many peripheral micro-markets where demand remained muted before the pandemic are now seeing renewed demand and supply. The previous desire to live in city centres—closer to workspaces, children’s school, etc—has reduced markedly with the advent of WFH and e-schooling options in the post-pandemic world. People now prefer to live in bigger, open and green spaces in peripheries and that too at affordable rates. Source: Naredco