Quality services at reasonable rates key to tap $93 billion worth co-living markt: Survey

Co-living operators need to improve quality of services and charge reasonable prices to boost demand for such spaces and exploit the true market potential of this segment estimated at USD 93 billion, according to a survey by housing brokerage firm PropTiger.Com. "The co-living segment in India has the potential to grow into a USD 93-billion market, however, changes must be made in the existing modus operandi to make this housing segment a success," it said in a report.

PropTiger.Com is part of News Corp-backed Elara Technologies, which also owns Housing.Com, Makaan.Com, and FastFox.Com.

The survey revealed that the quality of services, poor maintenance and lack of trust were main concern areas for consumer that service providers in this segment need to address. The co-living segment has total untapped demand of about 46.3 million beds, out of which 8.9 million is from student housing. The demand for co-living spaces is also increasing because of brand trust and ease of search, something paying guest accommodations are not able to provide to consumers. The consumer survey conducted in May 2019, also revealed that those looking for co-living spaces start their search online, including Facebook groups, but they also depend on various offline mediums to get to their final destinations.

On budget, the survey said respondents who took part in the consumer survey were willing to pay between Rs 4,500 to Rs 33,000 monthly, depending on the number of beds in a room, the service quality, brand, and amenities they wanted. "The survey indicated that while price is a key consideration, consumers are willing to pay for better amenities in a co-living setup," it said. There was also huge variance in tenure for which people want co-living spaces. While some of the respondents stayed for as long as five years in co-living spaces, others moved out within three months.

"Lack of transparency in the renting process and service providers' unresponsive approach towards maintenance facilities are some of the factors that act against this concept, leading to consumers moving to traditional housing options," the report said. The co-living segment would perform better if consumers were not obliged to pay security deposits, the survey revealed.

"Respondents who took part in the survey were of the view that opting for co-living spaces makes sense only if it amounts to lower monthly outgo as compared to independent rental options," the report said.