How Co-Living Is Addressing The Challenges Of India’s Real Estate Space
India’s co-living players are combining technology with human expertise to provide tenants with end-to-end housing experience.
Photo Credit : stanzaliving.com
The Indian real estate industry witnessed robust growth between the years 2005 and 2008, drawing attention from deep-pocketed global investors. According to industry estimates, the market received investments worth around USD 25 billion in various forms, during this period. The real estate space continued its impressive growth trajectory until the global financial crisis, which affected almost every industry worldwide. However, India’s real estate never fully recovered from the economic crash. While the commercial and retail spheres got affected, the residential segment took the biggest hit, caused by a sharp drop in property prices. In the following years, the real estate industry continued to face major challenges, including demonetization, implementation of GST and RERA (Real Estate Regulation Act), and funding shortage owing to the liquidity crisis.
But, things are now looking up for India’s real estate sector. An increase in demand for co-living and co-working spaces, coupled with the widespread adoption of technology and government initiatives for affordable housing, are pushing the market out of the slump. The IBEF January 2019 report states that the real estate industry in India may have a market value of USD 1 trillion by 2030. Industry watchers believe that the co-living sector will play a pivotal role in driving this growth. This nascent yet fast-growing segment of real estate is expected to present a business opportunity of 1 trillion, projects a joint report by JLL-FICCI. As the trend of co-living picks up, let us see how it can give a boost to the Indian real estate industry.
Reaping the benefits of the Model Tenancy Law
The supply-demand gap is the biggest challenge plaguing the residential real estate sector. The newly released Model Tenancy Law not only acknowledges this issue, but also aims to organize the fragmented rental housing market. Co-living companies can grab this opportunity, providing a greater push to rental housing in India. Given the fact that co-living companies eliminate the need for a third-party, there is little room left for landlord/tenant exploitation. Further, co-living space providers offer a greater level of transparency to the entire renting process.
Converting unsold inventories into ready-to-move-in homes
Nearly half of the country’s population, approximately 600 million people, are under 25 years old. Of these, a large percentage is moving to urban centres in search of jobs and economic opportunities. However, there is a severe shortage of quality affordable housing in tier-I cities and tier-II cities. This is despite the fact that millions of housing units are lying vacant across India. To tackle this unique problem, co-living startups vas started turning the unsold residential properties into fully-managed shared accommodations equipped with a wide range of lifestyle amenities.
Promoting active involvement of real estate developers
In the past, buying properties and then keeping it vacant for years was the standard practice among real estate developers. This led to a surge in property prices, forcing the common man to opt for substandard housing. Co-living companies have stepped forward to solve this problem of lack of affordable housing in India through partnerships with realty builders in the country. Most players operating in the co-living space operate on an asset-light model, in which realty developers make built-to-suit properties that are managed by co-living spaces.
Bringing in the plug-and-play concept to real estate
Until a couple of years back, India’s real estate industry was not familiar with the plug-and-play concept. Enter co-living, and industry players are now taking a full-stack approach to provide tenants with end-to-end service and maintenance support. Co-living space providers have made the process of shifting houses hassle-free by offering fully-managed, ready-to-move-in homes, where residents can move in with just their personal belongings. To enable added flexibility, companies also provide a wide range of houses to choose from, depending on their venue, affordability and style.
Integrating modern technology to bring in innovations
Co-living is one segment in real estate that has welcomed modern technologies with open arms. India’s co-living players are combining technology with human expertise to provide tenants with end-to-end housing experience. From offering virtual tours of the property to enable paperless tenant on-boarding process, companies are leveraging AI, virtual reality, chatbots and IoT-driven security features to attract as well as retain customers.
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