Opinion
Prices: Does location matter anymore?
Summary
Covid has set off a dispersal of residence choices, enabled by the internet and now evident in demand for real estate. Locational premiums will drop, but big cities won’t lose their appeal
Geography would be history, we were told by early forecasters of a world shrunk by the internet. This snappy slogan was held up as a positive prospect, but the first major signs of it actually happening arrived on the back of two calamities that shook us out of inertia: climate change and covid-19. One was slowly roiling our planet and making big cities unlivable before the other suddenly made office routines unviable. Jointly, they may have granted us the liberation dreamt up by visionaries, at least as mapped by our domicile in the real world. Consider brick-and-mortar trends—literally. As work-from-home has proven possible and begun evolving into work-from-anywhere, thanks to advances in telecom and the fanning out of wi-fi services, a scramble away from the madding urban sprawl has been afoot. Among India’s well-off, it has begun to crystallize in the shape of demand for second homes away from metropolitan places of residence. This could reshape our market for real estate in a profound way.
The value of property, as an old quip went, would always depend on three factors: location, location, location. After the covid shake-up, however, nobody can be too sure about that anymore. Locational links with office blocks in our metros have weakened. On Thursday, a realty report in Mint noted a sturdy sales uptick reported by realtors of the sort of homes that could be mistaken for weekend retreats were it not for the office spaces they have. Their prices range all the way from ₹50 lakh to ₹50 crore. Tech entrepreneurs, corporate honchos and non-resident Indians are among the most avid buyers, with their favourite picks dotting the country’s getaway map: from hill stations like Kasauli in the north to Coonoor in the south and from beach escape Goa in the west to short-hop destinations in the east. What is visible in the floor-plans being sought is that these spaces must enable remote work as well as leisure. This dual need also explains a broader dispersal within our biggest urban zones, as people have begun to shift out of central localities towards city suburbs, enlarging their living space for a double role. The same motive has driven former office-goers farther away to tier-II and tier-III cities. If target locations matter to these movers, it’s on account of personal preferences, internet speeds or some combination thereof, not where jobs are held or even businesses run. Over time, the net effect of this mega-trend could be a relative flattening of property values across the land. The oddity of an apartment in a prime spot selling for a hundred times the price for similar accommodation in a less fancied part of town, for example, might start vanishing from our urban scape, perhaps destined for a tale future generations are told of how the industrial age warped our lived reality.
Location counts for far less in a wired world, but whether it will ever lose all relevance as an attraction is far from certain. Our greatest cities down the ages have thrived on dynamic inter-actions among diverse folk drawn from all over. This is how much innovation happens, and the creative potential of that buzz cannot easily go online. Big cities also serve as theatres of socio-cultural effervescence. Moreover, so long as we remain social animals, we will converge and huddle, surely. As the pandemic peters out, travel looks set for a frenzy that will remind us of the magnetic pull of our busiest airports as hubs for flights that cover the globe. Work from anywhere, we will, but big cities will survive.
