Factors influencing the growth of co-living spaces in India

Co-living as a concept is gaining popularity in India. While the trend of paying guests (PG) accommodation has existed for years, co-living spaces have evolved to offer a modern style of community living. One of the major factors influencing the growth of co-living spaces is the rapid urbanisation and movement of people to other towns and cities for jobs or education. It is more popular in metropolitan cities and some of the top tier -2 cities, where like-minded individuals prefer to share accommodation, especially students or millennials. Moreover, several companies have emerged in the co-living segment, focusing on community building and offering affordable solutions for home seekers. Besides, co-living is also seen as an attractive asset class by property investors. In this article, we will discuss the key factors that drive co-living trends in India.

What is co-living?

Co-living is a rental housing model where two or more individuals, who are biologically unrelated, share a residential unit and use it for short-term or long-term stays. These units include private rooms like bedrooms and bathrooms and shared spaces such as living rooms and kitchen along with certain amenities. Renting an apartment in a prime city can be expensive for an individual. On the other hand, sharing an accommodation with another individual of the same age group can be a practical solution and opportunity for new social connections. Compared to traditional rented apartments, co-living spaces provide more flexibility and promote organised living with a focus on social interaction and community building.

Challenges faced in traditional rental housing in India

Lack of standardisation: This is one of the major concerns for both landlords and tenants. Landlords usually face issues with finding reliable tenants with the need to have a more organised system for tenant screening and background verification. On the other hand, tenants have to navigate the complex system involving high rental rates and payment of high-security deposits, especially in some top cities.

Inconsistency in quality: The lack of standardisation also extends to the quality of rental properties, which may vary significantly. While some properties come with all sorts of facilities, some may even lack the basic amenities or maintenance.

Lack of customisation: In India, rental properties are generally not customised according to the tenant’s preference. The landlords manage their property and design it to suit their preferences. This lack of flexibility in traditional renting is one of the key reasons that makes co-living a better option, especially for young home seekers.

Factors driving the growth of co-living spaces in India

Urban migration and lack of affordable rental options

Millions of individuals migrate to other towns and cities for better education, employment or lifestyle opportunities. The trend is mostly seen among people aged 20 to 35 years, including students and young working professionals. Moreover, the influx is mostly witnessed in metro cities or premium localities of tier-2 cities, where there are more opportunities. The favourable location, increased demand, and pace of infrastructure development result in high rental costs. The lack of affordable and quality rental housing is a major reason compelling these young home seekers to look for alternative options like co-living solutions.

Evolving preferences of young population

The young population today, comprising of millennials and Gen Z, have clearly defined housing needs, unlike their previous generations. These individuals are always on the go and seek convenience, flexibility and community over long-term commitments when it comes to rental housing. Moreover, their needs are influenced by frequent travelling or relocation due to job changes, which makes long-term rentals inconvenient. Moreover, many young adults look for networking opportunities and social connections and co-living fulfils these aspirations compared to traditional renting models.

Growth of remote working culture

After the Covid-19 pandemic, many companies started adopting the remote working culture. It gave working professionals the convenience of operating from their place of comfort while meeting their professional goals. Even now, as the concept of freelancing and remote working evolves, there is a greater need for co-living spaces that can match the evolving preferences of the working population. That is, it can provide flexibility in lease terms, focus on technology integration and promote community-driven events.

Demand from international clientele

Co-living spaces have a global appeal as they have become a preferred choice for several expatriates, exchange students and overseas professionals who visit India for work assignments. These spaces are furnished with essential facilities and include services such as housekeeping and laundry, thus meeting the everyday needs of individuals. In addition, it facilitates networking and encourages teamwork, enhancing people’s professional experiences.

Technology integration and sustainability

Co-living spaces in India have adopted technology combined with human expertise to ensure a better living experience for home seekers, which is a key factor behind their growing popularity. Co-living spaces feature modern high-tech facilities, covering Virtual Reality (VR), Artificial Intelligence (AI) and the Internet of Things (IoT). These homes mostly come with advanced home automation features, including smart locks and voice control. In a way, it also promotes sustainable living tracking usage of appliances and energy consumption becomes easy.

Housing.com News Viewpoint

The co-living model eliminates the problems of hefty rents and deposits and the lack of quality accommodations. For busy professionals who may not find time to furnish a house, co-living spaces provide all the conveniences and benefits like flexible leases and social interaction.

Compared to the traditional concepts of PGs and student hostels that lack strong policies, co-living spaces offer a secure, affordable and premium living experience for modern home seekers, fostering a sense of community.

As the number of urban migrants continues to rise, co-living promises to provide a cost-effective solution for the ever-increasing demand for quality rented accommodation.

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