Generational Shift in Realty Sector
Headquartered in Singapore, Assetz Property Group is a multinational real estate development and asset management company with four business verticals: Commercial, Residential, Warehousing and Fund Management. In 2006, it started its India operation from Bengaluru as a real estate services company. In conversation with Realty Plus, Mallanna Sasalu, Managing Director, Assetz Lifestyle spoke about the changing attitudes of both consumers and developers.
WHAT IS THE PROFILE OF PROPERTY BUYERS TODAY?
India is set to become one of the youngest countries in the world by 2020 with 28 years as the median age. It further suggests that 2/3rd of its population will economically be active, a majority of which will be residing in urban areas. This gives a glimpse of aspiring young generation who has rewritten code of living pattern.
Better known as ‘Generation Y Now’, it is teach savvy with comparatively higher disposal income. The consumers are mostly either single or have a nuclear family and come from a diverse cultural background. So when it comes to choosing a home, priorities of this generation is very different. For example, they prefer customised and furnished places equipped with technology features, security, better amenities, value for money and most important proximity to their workplace.
Hence, it’s quite pertinent that all the stakeholders involved should understand the changing requirements and accordingly address the same.
HOW IMPORTANT IS THE AFFORDABILITY FACTOR?
Wallet factor plays an important role but today’s buyers have the ability and willingness to pay a little extra if it adds a value. Also, time is the essence, so buyers would prefer to have a compact place for easier maintenance with better amenities rather than a bigger place. This is one of the reasons which has pushed the demand for compact homes in most cities across the country. In the last six months, the residential segment has witnessed several launches of many projects catering to this segment.
Also with diverse changes in our lifestyle, climate and economic scenario what was once seen as a luxury has become a necessity today.
For instance, CCTV camera is a bare essential for any housing project, similarly, a decade back air-conditioner in Bengaluru was considered a luxury but today it’s a requirement. To sum-up, today more than the affordability, the additional facilities and amenities have more impact when it comes to finalising a home.
WHAT ARE THE REAL-ESTATE TRENDS IN TIER-II CITIES?
The benefit of overall economic growth has trickled down to the tier-II cities, which is also reflected in the real estate growth in these geographies. For developers, these locations are emerging hot-spots where they can invest and expand their footprints. The availability of larger land parcels is also a prime reason which has contributed towards the growth of real estate sector.
From buyer’s standpoint, residents of tier-II two cities are aspiring for new experiences. But, when it comes to residential projects, these cities are still in early stages of evolution. Despite this tier-II cities have transformed into better investment destination, as people in bigger cities have started buying properties in these locations as a future investment.
As metros and bigger cities are contributing towards ongoing growth of the real estate industry, tire-II cities will propel the future growth.
CHALLENGES FOR THE DEVELOPERS IN CATERING TO THE BUYER CHANGED EXPECTATIONS
Indian real estate sector today is at a critical juncture, which will decide its future growth pattern. The nature of this industry is quite dynamic and vibrant as it primarily depends on the economies of scale which is purely related to demand and supply of the end product (here homes).
It becomes quite pertinent for a developer to understand the changing needs of a customer and address it accordingly. Thus, in order to address the growing needs of the buyer, a developer must strive to acquire skills that go beyond construction – they should be well-versed with the latest trends and regulations. The consumer savvy developer must endeavour to play a multifaceted role of a mentor who enables buyers to attain quality living while also envisaging problems along the way.
SOME IMPORTANT CONSIDERATIONS WHILE AVAILING A HOME LOAN
Thorough research: Before applying for a loan one should do an analytic comparison of all the banks and see which one fits the needs. Some banks allow borrowers to put additional funds in the loan account which helps towards reducing the interest. Whereas, some other banks give the option for overdraft, so accordingly a bank should be selected to fit the home buyers criteria.
Understanding of interest rates: There are two types of interest rates: floating and fixed. As its namesake, floating interest rate is linked to market and changes according to market fluctuation. But, a fixed interest rate remains fixed for the stipulated loan tenure. Depending on the prevalent interest rate, one can go for fixed or floating rate.
CIBIL Score: Apart from these, one should also give emphasis to CIBIL score, which helps towards sanction of loan. Finally, if possible always go for foreclosure of a loan as RBI has banned foreclosure penalties, thus, one doesn’t have to pay anything extra for the same.