For years, homebuyers have been flocking to city-centres and close-in suburbs, seeking a better lifestyle by shortening their commutes and gaining easy access to recreational facilities. However, the pandemic turned this trend on its head.
As remote working became the norm in 2020, many city dwellers migrated to the suburbs and smaller cities to get more space. A recent consumer survey by CII-ANAROCK found that at least 43% of homebuyers now prefer living in peripheral areas while just 28% favour homes in the city limits (in proximity to offices).
“Over the last year, home buying trends have undergone a phenomenal change impacted by varied preferences based on health and space. This is unlike the past when locations for homes were selected primarily based on their proximity to commercial districts. The work-from-home scenario, the need for safety, hygiene and a clean living environment has encouraged buyers to opt for locations along the peripheral areas,” said Prashin Jhobalia, VP Marketing Strategy House of Hiranandani.
Apart from changing real estate consumer preferences in a strengthening WFH environment, affordability is another reason for this shift.
Explaining the same, Jayesh Rathod, Executive Director, The Guardians Real Estate Advisory said, “Peripheral areas around metro cities have witnessed the development of affordable housing projects since the past few years. The reduced cost per square feet vis-a-vis the neighbouring metro cities, negligible transaction cost, government subsidies, and increased supply has led to growth in demand for such vicinities.”
The affordable home segment has performed considerably well in the adjoined areas of large cities as a result of the infrastructure development around major cities of the country. Infrastructure development has brought about better connectivity to the parent city, resulting in migration to peripheral areas by the budget sensitive homebuyer.
Not to mention, residences in the peripheries are not only comparatively economical but are also spacious.
Understanding the demand
Given the shift towards the work-from-home culture, there is a rising need for more space within our home to adapt to the new normal. Thus, prospective buyers are now looking to buy houses that provide much larger space that can be converted to workspace or study space depending on the buyer’s need.
Additionally, “There is a growing demand for projects with premium facilities including clubhouses, fitness centres, swimming pools, playgrounds and sports facilities, as well as on-site supermarkets and pharmacies for added convenience and comfort. Homebuyers are also increasingly choosing projects with an abundance of natural surroundings and open spaces which are more readily available in the peripheral areas,” explains Rakesh Reddy, Director, Aparna Constructions & Estates.
Markets to consider
Hyderabad
“The peripheral areas of Hyderabad are characterised by an abundance of gated communities and integrated townships, which are the future of Hyderabad’s urban planning initiatives. The state government has invested heavily in Hyderabad’s infrastructure facilities and connectivity in the peripheral areas thus making these integrated townships a viable option for homebuyers,” explains Rakesh.
Some markets to consider are:
- Nallagandla and Chandanagar are growing areas that have strategic proximity to the IT and Finance hubs. While Nallagandla is rapidly developing and becoming a residential hotspot, nearby areas including Lingampally and BHEL Township are also gaining interest.
- Kompally is a developing residential suburb in the north of Hyderabad. The affordability of the locality makes it an attractive option for home buyers. Several companies are setting up their offices in Kompally, thus attracting people from other parts of the city.
- The southern suburb of Shamshabad is becoming a highly sought-after residential location. Many companies have opened their offices in Shamshabad due to its proximity to the International Airport. Additionally, easy accessibility to the Outer Ring Road has further made conveyance easy throughout the city.
To balance infrastructure development across the city, the state government has proposed the concept of “Look East” which will develop a new IT corridor in the eastern part of Hyderabad including Uppal, Pocharam, Ghatkesar and Sagar Highways. This development will bolster residential real estate growth in the peripheral areas of east Hyderabad.
Bangalore
“Bangalore has always been a city that is known for expanding horizontally rather than vertically over the years. Locations like Bannerghatta Road, Yelahanka, Sarjapur Road, and even HSR Layout that were once considered outskirts are today prominent real estate hotspots. Another example to demonstrate this phenomenon was when the city got its new airport on the outskirts; there was hardly any infrastructure or connectivity to that part of the city. However, in the past few years, North Bangalore has become a hotspot for real estate investments,” explains Ashish R. Puravankara, Managing Director, Puravankara Limited.
Some of the markets to consider include Thannisandra, Hennur Hosahalli, Jigani, Abbigere, Seegehalli, Nallurhalli, and Attibele.
Chennai
“Among all the locations along the periphery of the city, the Old Mahabalipuram Road (OMR) is the best location for homebuyers,” believes Prashin.
OMR, popularly known as the IT corridor, is a 45 km stretch extending from Madhya Kailash temple in Adyar (South Chennai) to Mahabalipuram in the Kanchipuram district. Within a short period, the location has turned in to one of the most distinguished properties of Chennai due to its robust connectivity, presence of IT parks and proposed infrastructure development.
In terms of connectivity, OMR, being a key locality, is connected with other parts of the city. It is well connected to the international airport and local railway station. Proposed infrastructure in terms of elevated roads, metro rail will provide an impetus to the existing connectivity and growth in this region.
The returns on investment in a residential property in OMR have been good as the locality has been consistently growing. The proposed infrastructure will further strengthen the outlook for the region.
The way forward
So, will this trend continue in the times to come?
Well, according to Jayesh, “This trend is not just going to continue but is also likely to accelerate in the years to follow. Projects in the peripheral vicinities, around major cities, offer volumes to developers and end up taking care of their cash flow requirements consistently. It is for that reason that many well-known, branded developers have forayed into the affordable housing segment with majority projects planned in the adjoining vicinities.”
Reiterating the same, Prashin said, “The outlook for peripheral areas also looks fairly robust due to the government’s focus on developing key infrastructure around these areas. Thus, the development of physical infrastructure in terms of roads, highways, water supply, and electricity has improved to a considerable extent. The recent budget’s focus on infrastructure development can provide a further impetus to the existing growth along the peripheral regions.”
“This trend is likely to continue, especially in end-user driven markets, as the regions will expand geographically to meet the demand. The improved connectivity, commercial development, lower capital values, growth in rental housing, and infrastructure expansion have put these peripheral areas on the city’s hotspot realty zone list. Last but certainly not least, with affordable housing gaining momentum, there is a constant surge in white-collar migration, and rapid urbanisation will continue to propel the demand for projects in the city’s peripheries,” concludes Ashish.