The Post-COVID Transformation of India's Real Estate Market
The COVID-19 pandemic has reshaped urban infrastructure and real estate in India, leading to a shift in homeowner preferences and the rise of suburban living. Discover how this transformation is driven by improved urban infrastructure and finance.
Urban InfrastructureReal EstateCovid19 ImpactSmart Urban PlanningNisus FinanceReal Estate MumbaiMay 26, 2025
As the COVID-19 pandemic hit, it acted as a reset button in terms of real estate. What started as a public health crisis soon evolved into a catalyst for one of the most catalytic shifts in homeowner preferences and sentiments in the country. It changed what “home” truly meant to us. As we defaulted to lockdowns, and social distancing forced us to stay at home, the same space started feeling smaller. Our homes turned into our workspace, school, and everything in between. Home is no longer a place we come back to in order to relax; it has now become the epicenter of all aspects of our life.
According to the ANAROCK-FICCI Homeowner Sentiment Survey, 53% of homeowners expressed their discontent with their current home size. The key reason being unit sizes. 51% of the respondents stated they preferred 3BHKs over any other unit sizes. Even in Pune, traditionally a market for 2BHKs, the appetite for more space is growing rapidly. The data further indicates that average flat sizes in the top seven cities grew by 11% annually in 2023, from 1,175 sq ft in 2022 to 1,300 sq ft in 2023.
The shift wasn't due to size alone; it was about the quality of life. Now, with less pressure to live near office corridors, buyers turned their attention to the outskirts. Places like Navi Mumbai, Thane, and parts of Pune and Bengaluru’s periphery that had traditionally been overlooked in favor of more central addresses, became a focal point. The MagicBricks Tier-2 study highlights that many companies have expanded to smaller cities during the pandemic, making Tier-2’s “less congestion, lower costs” appealing. Demand for 3BHK apartments particularly rose in cities like Chennai, Hyderabad, Delhi-NCR, and Bengaluru. To make staying at home more bearable, Indians have now started wanting balconies as a priority, with around 75% of property seekers demanding the same. Moreover, there has been a shift towards premium housing options. The demand for homes priced between ₹90 lakh and ₹1.5 crore has increased, with 28% of respondents preferring this range in 2024, up from 18% in the pre-COVID period.
This is where the role of Urban Infrastructure Finance Companies quietly but powerfully started to matter more than ever. While the headlines were focused on shifting buyer preferences and booming digital property platforms, what enabled this decentralized housing demand to take root was the backbone of urban infrastructure—roads, water, power, sanitation, and public transport. Without upgraded physical infrastructure in peripheral areas, the aspiration for larger homes would have remained just that—an aspiration.
The urban infrastructure and real estate finance companies didn’t just fund construction; they helped build livable ecosystems. By channeling investments into suburban infrastructure, affordable housing projects, and smart urban planning, they effectively broadened the map of what could be considered “home.” Their role, often behind the scenes, has allowed developers to take on bolder projects in emerging micro-markets and has given buyers confidence to invest beyond city cores. In many ways, they’ve acted as silent partners in this post-COVID housing transition, underwriting the long-term viability of the real estate rebound.
At a macro level, the pandemic created a new normal—not only for lifestyle choices but also for the very fabric of urban development in India. Urban Infrastructure Finance Companies became a bridge between shifting consumer behavior and the physical transformation of cities. They’ve played a pivotal role in shaping the new real estate narrative—one that’s more decentralized, more inclusive, and arguably more sustainable.
As we continue to see growth in tier-2 cities and suburban corridors, it’s increasingly clear that this change is not just a temporary reaction to a crisis, but a long-term evolution. The future of Indian real estate will be shaped as much by the choices of homebuyers as by the invisible hands that build the roads, fund the housing, and make new urban dreams possible.
Frequently Asked Questions
How did the COVID-19 pandemic affect homeowner preferences in India?
The pandemic led to a significant shift in homeowner preferences, with a growing demand for larger homes, particularly 3BHKs, and a preference for suburban and tier-2 cities over densely populated urban centers.
What role did Urban Infrastructure Finance Companies play in this transformation?
Urban Infrastructure Finance Companies played a crucial role by funding the necessary infrastructure improvements in peripheral areas, enabling the shift towards larger and more livable homes in these regions.
Why are balconies becoming a priority for property seekers in India?
Balconies are becoming a priority for property seekers as they provide additional outdoor space, which is highly valued for enhancing the quality of life, especially during extended periods of staying at home.
What is the trend in home prices in India post-COVID?
There has been a notable increase in demand for homes priced between ₹90 lakh and ₹1.5 crore, reflecting a shift towards premium housing options as people seek larger and more comfortable living spaces.
How has the real estate market in tier-2 cities been affected?
Tier-2 cities have seen a surge in demand for 3BHK apartments and larger homes, driven by the expansion of companies to these areas and the appeal of less congestion and lower costs compared to major metropolitan cities.
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