Stay Home, Stay Safe (Vol. 1)

In a series of articles starting today, I'll be presenting my views on the future of real estate covering the assessment of the scenario caused by Covid19, psychological factors leading to fundamental shifts in consumer behaviour, its implication for brands and the recommended approach in order to succeed in a post 2020 world order.

It's the 1970s. A Mumbai-based billionaire is planning to open up a club in an affluent neighbourhood catering to the Bollywood celebrities and affluent business families in the locality. He seeks advise from friends and family on the nomenclature. Lots of interesting names come up starting from Area 51, Nightlife, Club Cabana, so on... Still undecided, until he meets a young brand consultant who suggests naming it 'The Club'. Bemused, the billionaire seeks a rationale. The brand consultant says, "Picture a conversation between two housewives planning a kitty party..."

HW1: Hey, I'm planning to host a kitty party next month.

HW2: Wow, that's so cool. Where do you plan to host it?

HW1: Emmm, I was thinking of hosting it at the club instead of my living room this time.

HW2: Wow, that's a great idea. But which club?

HW1: Well, the club! Haven't you heard of the club? It's this latest, cool... (and the conversation continues)

The brand consultant continues, "Merely by choosing to name the club The Club, you're becoming a part of conversations 3 times more than you'd by naming it anything else. And all of this without spending a penny on marketing." The rest is history.

The story above is a refresher to one of the basic principles of brand management: When a brand or a category becomes a part of conversations, it grows. And in today's information age, with social media being the most dominant channel, this age old wisdom holds more water than ever before. Owing to the Covid19 crisis, Governments across the world have unanimously urged their citizens to stay at home. As a result, the phrase "Stay Home. Stay Safe" is uttered at least a billion times per day across conversations, social media, conventional print, broadcast media and all other possible channels; with daily impressions in excess of 12 billion and a unique reach of at least 4 billion.

One thing is certain - those who do not own a home yet, are very seriously going to consider the need for a permanent, primary place of stay. Never before and perhaps never again, will the need for a safe and sound family abode be more accentuated than the present global scenario. It reminds me of one of the old Sobha ads that we had come up with to highlight the importance a good quality family home (Your family will live here for generations...).

The next pertinent question is:

• Who are these people?

People who're going to matter for real estate brands are (a) People on the verge (b) Millenials and (c) Gen Z. If anything, the pandemic will act as a catalyst for those on the verge of buying a home. Millenials who'd prioritized global mobility and life experiences over owning a home over the last 5 years, will re-align their life goals and compasses. Covid19 will also lead to a subconscious need creation in the minds of Gen Z, who may not be immediate buyers, but can be potential targets in a few years from now. "Catch them young, watch them grow" - yet another adage in brand management - will start to find relevance again in Real Estate, which in recent years had wryly relegated the role of marketing to devise beaten-to-death-tactical-promos.

• When will they make their purchase?

The people on the verge will make their purchase as soon as they get a bargain deal on their target properties. This category of buyers may go to the extent of liquidating some of their other asset classes and move the money into real estate. Secondary market offerings will become increasingly relevant to this segment of buyers owing to zero risk of delivery and panic selling of assets by investors who might have run out of liquidity owing to the crisis. The millenial-buying behaviour is likely to be seen in 2021 since their immediate goals will be to secure jobs, salaries and financial stability by curbing other forms of spending. This segment will be predominantly mortgage-buyers and reducing rates of borrowing are likely to boost their sentiments further.

• Does this mean that real estate will boom once the crisis is over?

The short answer to the question above is NO. But, there will be a spike in activities between July-November 2020. Developers and brokerage firms that have had strong fundamentals, will flourish since they'd be best equipped to tap into the temporary spike in demand that we'll witness once the restrictions are lifted. From a developer perspective, players sitting on a good stock of delivered projects and an aggressive focus on delivery and handover will see a lot of movement in their ready/ near-ready inventory. This will result in a welcome inflow of cash in the short term that'll help these firms make planned investments for the tough times ahead. From a brokerage perspective, players with a good stock of well-priced listings for rentals as well as secondary sale will reap the benefits.

The good news and the big positive is that there is a favourable shift in the predisposition of people towards housing. Primary demand will build up, but it'll be gradual. Therefore the industry will have to wait for some time before being able to reap the benefits of this milestone shift that has been triggered by the virus. Firms will need to devise robust strategies and take decisive steps in order to be ready to reap the benefits of this phenomenon and tackle the challenges that the future is likely to throw up.

My next article will focus on - "the robust strategies and decisive measures a real estate firm should adopt in order to tackle the future". I'll be breaking down the future into specific time periods and proposing specific action points for each.