Millennial – the people born between 1980 and 1995 have been said to be ‘job-hoppers’. As opposed to our previous generations, we are not shy about looking for new opportunities. This is rightly put forward by a recent report by Gallup that suggests that 21% of millennial have changed jobs in the past year and this is three times the job switch done by non-millennial. 60% of working millennial is open to new opportunities and 36% report searching for a job change in the next year.
Millennials perceive living spaces differently than their parents and grandparents. This is a generation has grown up with technology and social media and embraces the idea of a sharing economy. They are extremely adaptable and much more enthusiastic about sharing facilities. Owning a home is no more a milestone, but today people look to engage in social activities and hang out with like-minded people. And it’s no surprise that co-living or the urban type of accommodation is beginning to gain traction.
The Co-living industry is rapidly growing, in fact, reports claim it’s the going to completely reshape the real estate market in the coming few years. Many companies are trying to jump into this bandwagon, in the run to cash in on the rising demand. But, this industry is still new and needs a lot of work to succeed.
Co-living And The Indian Market
By the year 2020, India will be the youngest nation in the world, with over 60% of the population below 30 years of age. The rise in the young population alongside the need to constantly move to newer cities for better career opportunities have increased the popularity of co-living spaces in the country than ever before.
Co-living homes combine private spaces (bedrooms and bathrooms) with communal/shared areas like kitchen, living rooms, dining area, game rooms, utility spaces or the gardens. So, while you have the comfort, safety, and privacy of your own bedroom, you can always come out to become a part of a larger community of like-minded folks. Residents share both the chores and the rent/bills of the apartment, making it affordable for all. While realtors profit by as much as 12% higher yield from this process, residents get a home that offers more human interactions and are less lonely.
Several co-living businesses and service providers emerged in the Indian market in the past few years. Service providers like CoHo, CoLife, ZiffyHomes, and StayAbode have been continually investing in infrastructures designed for community living. In cities like Bangalore, Mumbai, and Delhi, the occupancy rate is already higher than 95-97% and the demand has been ever increasing.
The entry of such players will not only bring standardization in the existing co-living set-ups but also provide a monetization break for the real-estate developers and home-owners who may be sitting on an idle inventory.
How Will Co-Living Industry Become Mainstream?
1. Investor Confidence
The co-living space in India has been emergent with several startups, companies like NestAway, CoLive, StayAdobe and Stanza Living have been raising massive funds towards expansion. CoLive alone raised around $1.8 Mn in Feb 2018 from Ncubate Capital Partners. The Managing Partner of Ncubate, Rakesh Malhotra, said, “With this investment, I am looking forward to the exponential growth that CoLive is poised to achieve in the next few years. With more people renting than buying, CoLive has a massive potential across the market.” Investor confidence is essence for the growth of this industry.
2. Central Locations
This is self-explanatory, centrally placed co-living spaces will have more demand. Students and young professionals move to top cities looking for jobs or start a business. Being centrally located only makes sense. Further with rent for private spaces spiking and the complete lack of space for new construction, co-living accommodations in central locations can be a huge driver of business.
3. Rising Demand
While PGs and hostels are still present, co-living is luring majority of the millennials. But rising demand for co-living spaces means companies will soon try to fit in more people in less space, something its already doing. Prioritizing more beds over comfort, that’s definitely not what the end users would look for. Howsoever small, co-living should be a more comfortable and affordable experience. Also, to make co-living appetizing to a wider audience, making the service tech-friendly and attractive is equally important.
Co-living isn’t only for the young students/working professionals. Diversity in terms of age, background, and industries could benefit the overall community. Marketers, code developers, musicians and photographers, for instance, make a heterogeneous but vibrant group. Hence targeting only, the young could be lost business opportunity.
5. Community Building
The increasing demand for co-living lies in the community living it offers to the students/professionals living away from families. For the industry to succeed, it would be important to find answers to – “How to get people to collaborate?”, “How to spark the community?”, “How to handle cases of conflict?”. Only then it could stick on to its USP.
Despite the fact that the demand for condominium or traditional apartments will always be there, expressly for those with families, there is no disagreeing that the millennial workforce will choose to stay at spaces that are defined by their needs and the metropolises they choose to live in.
Co-living is bringing together these shifts and creating a fresh mode of housing for this bold new world.