The real state sector in India has been going through a sea of change in the last five to seven years and is now going to have a more visible change in the coming decade or so. This had to happen! We must realise the fact that if anything and everything around us has changed then how could real estate be isolated and not get affected by the change. The sad part is that the manufacturers or the builders could not see the change and kept churning out 1/2/3 BHK and found it very difficult to think beyond that. The writing was on the wall, when certain products stop selling or their sale reduces its a clear indication by the consumer that they want a change, so to put it in perspective that today a simple product like films doesn’t sell with the huge cast unless it has good content and some of the small budget films have done exceptionally well considering the storyline etc. The market started giving indications long before as the consumer had got fed up of the same typical and predictable stuff, so the result was that the industry had to give the consumer a content-based product which started getting absorbed and the consumer did not care about the caste or the location, item number etc., unless the movies made sense. Similarly, real estate products have become extremely boring and so typical and predictable that the manufacturers have no creativity in producing newer products that can excite the new generation of buyers or consumers.
Today’s younger generation or let’s say the millennials need very practical and ready to use products in real estate. It’s not their fault, it’s a generation of NOW. They want everything just now, as and when they think of something, they need to have it. They have very little patience and huge commitment phobia. These are some of the key factors that a builder must keep in mind before designing any new product for this generation. Today’s consumer thinks of Italian food and has it on their table in 30 mins in their living room, thinks of a garment or a gadget and immediately surfs the net and orders for it, thinks of going for movie and books tickets immediately and so on and so forth. They cannot plan in advance to buy anything, hence the under construction products reduced selling. They don’t want to get bound by EMI’s as they don’t want long term commitments as they are not sure of their whereabouts of more than a year or two max.
Looking at the consumer persona or buying behaviour one will notice that today newer products that are ready to use and with flexible commitments are doing much better, such as co-working or co-living. This goes to show that this consumer does not want to have a long term commitment on housing and hence is happy to move into an apartment where he or she can share it with like-minded room-mates and move out without any hassle. If one is looking at starting a small business or a consulting firm, they don’t have to go through the entire rigorous process of setting up of an office and then managing it, they just move into a sharing office or a co-working space. Going forward, the builders must take a huge cue from this scenario and start creating rental products for all types of real estate requirements. The next generation or today’s millennials have an aversion to accumulating assets and the binding that comes with it. They are happy to live in a rental home or use a co-working space and get done with it instead of wasting their time on creating one. They rather spend or invest their hard earned money on experiences such as sky diving, or a trip to Croatia or maybe buy a cruiser bike.
There are several real estate products that the developers have never thought of and have a huge market out there. To name a few, student accommodation or hostels, warehousing, senior living etc. The time today is of concepts and ideas. Any product or service that does not excite a consumer is tough to sell unless it is a life-saving drug or so. We must create a different kind of experience for the buyer and only then they are going to invest or use it. Those days of ‘seller’s market’ in this sector are gone and will never ever come back. So the builders must forget the past and wake up to the reality of the new consumer persona and identify it quickly. The ones who accept the change and will move with it shall survive. The ones who will not…will perish!
This article has been contributed by Mr. Yogesh Mehra, Founder and CEO of Tribe Student Accommodation. Tribe Student Accommodation is more than just a modern-day hostel. It is a brand that will have several national and international outposts, catering to the urgent requirement for premium housing for students.