Have you ever felt overwhelmed while looking for a place to live in a new city? I bet you certainly have. Choosing a location and determining how much you can afford to spend on rent is one big headache. Let alone finding roommates. It no doubt requires time and effort to do all that. However, co-living has become a popular alternative to standard housing alternatives.
India’s housing sector is worth $50 billion, with 15 million migrant students and 40 million migrant professionals. The FICCI has estimated that India’s Co-Living Industry would reach the 1 trillion mark by 2023. So, who is the driving force behind this? Nomadic millennials. Yes, you heard it right!
Also read: CO-LIVING: THE NEXT BIG TREND AMONG WORKING MILLENNIALS
The nomads of today are such a key force pushing the Indian co-living market. It has been estimated 42% of the workforce in India in 2018 comprised millennials across the top seven cities. Furthermore, millennials will continue to make up a sizable share of the country’s working population, accounting for about 41% of the workforce by 2023. There is no doubt that millennials are the main target for co-living models. It aims to provide community spaces with monthly rentals ranging from roughly Rs.7500 to 30,000. However, that depends on whether it is a shared or private room, utilities (water and electricity), and amenities (WiFi, housekeeping, meal services).
So what exactly is coliving?
Coliving is a real estate phrase that has lately gained popularity due to the growth of housing companies that provide inexpensive accommodation in houses shared by five or more adult housemates. These co-living spaces come in shapes and sizes, ranging from a refurbished single-family property to accommodate non-related families to floors of a high-rise structure into dormitory-style housing. Coliving housing frequently includes short-term or flexible leases. It also has facilities like cleaning services, professionally furnished common spaces, and turn-key amenities and utilities.
Also read: Co-living Spaces In India – blending technology and operations
While shared living is not a new concept, what attracts the younger generation is the ‘ease of living’ given by co-living places, a varied array of facilities, and unparalleled services. Young people are no longer prepared to deal with obstinate landlords, and issues such as a large deposit and a rigorous lock-in period contribute to this notion.
In contrast to other shared living arrangements, co-living encourages social engagement and community development. Curated activities for residents, such as open mics, grilling sessions, karaoke nights, and a flea market, encourage social interaction. It also helps individuals who choose to live in co-living environments to feel more at home. Coliving models get designed to make people’s lives easier by providing amenities and high quality of living. It is no doubt many individuals all across the world embrace and support the coliving model.
But why are coliving models a hit in India?
Let us now try to understand why or what contributes to coliving being a hit in India.
- Urbanization: The rate of urbanization has risen. The urban population in India is growing from 28 percent of the overall population in 2001 to 31 percent in 2011. This figure is estimated to rise to 40 percent by 2030. Thus, migration to cities remains a significant phenomenon, driven by demographic expansion and poverty-induced rural-urban migration. In 2018, an estimated 4.7 million migrant millennials worked in the services industry across India’s top seven cities. FICCI also estimates this is likely to expand at an 8 percent CAGR and reach over 7 million by 2023, driving demand for rental homes even more.
- Convenience: A survey conducted by Knight Frank found that more than 70% of millennials in India choose co-living because of the freedom and options provided. Thus, the majority of millennials prefer co-living to typical renting models because they can avoid three concerns. The first is the lack of established procedures for security deposits and notice periods; the second is social approval issues for renting apartments to young people and single working professionals. The third is problems with cleaning, utility bill payment, maintenance, furnishings and fittings, and leasing contract renewal. Thus, one of the primary benefits of co-living spaces over PGs or hostels is it reduces the cost of living. It is so because individuals share the rent while also enjoying add-on services such as daily housekeeping, laundry, on-call resident facility management, curated meals, and so on.
- Community: Furthermore, coliving models emphasize the community. Co-living operators foster communities by focusing on social activities, events, and workshops. They also use personality profiling to pair inhabitants with other people who share their interests. Thus, this is the intangible benefit of living in a coliving space. It allows inhabitants to find their tribe outside of the office or college. It also has a significant favorable influence on an individual’s overall well-being.
- Technological edge: Most co-living models and spaces get heavily driven by technology. So, one only needs to press a button on their phone to find the perfect spot to live. Co-living companies have also set a premium on mobile app users to make members’ life simple. It enables communication between the renter and the operator in the case that quick help is necessary. Owners of co-living properties also prioritize security and safety by installing biometric and face recognition systems. They also have a 24-hour concierge and hired guards and wardens. Thus, all of these factors contribute to millennials’ preference for co-living situations.
- Affordability: Contrary to common belief, co-living spaces are now reasonably priced. Non-sharing studios typically rent for Rs 20,000 to Rs 30,000 per month, whereas twin-sharing studios rent for Rs 10,000 to Rs 15,000 per month. When compared to a per-square-foot basis, co-living may look expensive. But the rent includes maintenance, housekeeping, laundry, game room, furniture, TV, security, CCTV surveillance, and everything you need, making it a cost-effective alternative. Furthermore, most co-living locations are close to major employment hubs, reducing commute time and allowing folks to live for thousands of years longer.
The surge of freelancers, entrepreneurs, and remote workers, as well as networking-obsessed millennials, are all elements that will soon make co-living a necessity. Co-living spaces will grow in ways, from creating a sense of community to delivering extraordinary facilities.
Furthermore, with the emergence of new players in the segment and growing acceptance, we are confident that co-living will be the next big wave in India. It will transform the real estate landscape in Tier-1 and Tier-2 cities, particularly IT hubs and centers that are magnets for young people pursuing professional and academic goals.
Also read: Co-living Spaces- A Coming Age of Real Estate Investment
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