The Drivers Of The Co-living Industry
When the 2020 pandemic unexpectedly drove us indoors en masse and brought any form of traveling to a grinding halt, the real estate sector, suffered from greatly diminished revenues. At the same time, something interesting also happened
Where we live—our home or house—is a key determinant of the life we want to lead. The way we live is a determinant of our health: physical, mental and financial. Health outcomes are affected to a large extent by affordability, quality, stability, accessibility and up to a certain extent an emotional link to housing. When the 2020 pandemic unexpectedly drove us indoors en masse and brought any form of travelling to a grinding halt, the real estate sector, suffered from greatly diminished revenues. At the same time, something interesting also happened.
The pandemic gave rise to a new lifestyle.
Remote working has become commonplace as businesses needed a stable digital infrastructure to "work-from-anywhere', in some cases, permanently so. With remote working's growth as an option, forms of co-living, essentially "intent-driven shared communities instead of simply accommodations', i.e., purpose built accommodations (PBAs), are also being welcomed by "digital nomads' and migrants, primarily driven by the needs of Indian Gen Zs and Millennials, who according to World Bank projections, account for around 27 per cent and around 24 per cent of the world population respectively.
Let us understand why this signals a plethora of opportunities for the real estate sector in the post-pandemic era.
(Re)Unfolding of an ancient culture spurred by shared economy
Digital nomads of today's generation as well as investors in the real estate segment are getting warmed up to buy-to-let products (where you rent assets instead of owning them). As they are among the largest working populations in the world, their education prospects are getting brighter, their career prospects bolder. For anyone looking to migrate to a city or do freelance work remotely, co-living has increasingly surpassed its value beyond a ready-to-move-in rental housing space, to an aspirational one. Young migrants want to live with like-minded individuals, and a place where everything is co-productive, affordable and accessible. Living in a shared economy means the value is co-created.
They prefer living with a sense of community, but also enjoy the much-needed quiet time. They define single-dom devoid of sharing space with strangers, and steer decisions based on factors such as hygiene, privacy and cleanliness. A recent survey of the urban youth population shows that 91 per cent of respondents prefer to live alone, and 76 per cent prefer living a single life, rather than ganging up with friends or living as a couple. They want a flexible rental agreement that eliminates the need to buy furniture, kitchen equipment or overextend their monthly budget. Nearly 65 per cent can pay less than INR 10,000 per month for rent, and 69 per cent need regular pocket-friendly meals. Most co-living facilities offer furnished rooms, three meals a day as well as value-added community gym areas for working out, entertainment rooms and workspaces.
More than an industry therefore, co-living has become a hallmark of better living. This also means that it is an aspirational pursuit for urban and community planning, a sustainable tool for better social capital with higher trust levels. If executed well, several aspects of communal living can solve several affordable housing challenges across India's urban geographies.
The future of living: Tale as old as time
Despite being perceived as a fairly modern concept, co-living or community-led living dates as far back as the human civilization, bet it hunter-gatherers living in large, mobile camps together, or the 17th century where monks were housed in monasteries. There is no question that nomadic-community living will become even more commonplace in the post-COVID world. In fact, the need for affordable living places will be on the rise as migrant millennial workers return to major cities post-vaccination and step into offices again or choose long "workcations' (remote work + vacation) from exotic tourist spots.
Who knew that this trend as old as time will end being our future one day? History truly repeats itself!