Real estate news on Demand for 1-BHK flats on the rise

Price Trends, Real Estate services, Residential Properties, Mumbai, Real Estate Service (RES)
Posted on Oct 04, 2016
Mumbai

Developers are focusing on young buyers who are investing in one-BHK and studio apartments this festive season.

Manali Patankar and her husband Sumit both 28, knew they wouldn't be able to buy a big house in the vicinity of their office. The two were realistic in their approach; they knew that buying a house in Mumbai could put them over the edge. When the time came to stop renting and finally buying their first home, the couple researched on all the possible locations in and outside Mumbai. "We were renting for three years. We both just knew that it was time to invest," says Patankar, adding further, "We knew what the costs were going to be and we were comfortable with them." And like many buyers, the couple chose this festive season to make the investment.

Armed with a budget of Rs 35 lakhs, they checked with all the brokers in Mumbai and Navi Mumbai on the options for their investment and bought themselves a one-BHK flat in Kharghar. "There's a whole range of considerations we took into account even before we started to look for homes such as the neighbourhood, the size of the home, the family's goals, lifestyle and nearby school, and more," said Sumit. To this Manali added, "We were looking for an area from where we could commute to our office and offers a good infrastructure for our family in future. Most of the developers also offered us a good choice in one-BHK segment."

In today's times, young couples have a dream of owning their own apartments in Mumbai as a security factor or as an asset for them. Since they cannot look at purchasing a 2BHK or 3BHK, the most viable option for them is a 1BHK or studio apartment as their investment option. Builders have thus understood the need for small configuration apartments and to survive in the current market, it is necessary to meet the demand pattern. Dhaval Ajmera, leading developer says, "In Mumbai, areas like Andheri, Bandra, and Dadar are some of the key areas that are the hub of small configuration apartments. The hectic life of Mumbai and difficulty in travelling through public transport during peak hours has led many young couples to stay closer to their work-place. Hence, young buyers are now opting for studio apartments or small configuration apartments rather than shelling out rent. All in all, the demand for one-BHK is eternal and they will remain in demand for the young working couples."

There has been a major change in trend why people are buying a home today. What they look at is definitely the comfort of a home and proximity to other necessities of life like a supermarket, medical centre, business centre, clubhouse, school, hospital and such more amenities.

The age of a customer buying a house has also reduced over a period of time. Younger couples, not taking a chance of very high loan instalment, prefer to buy a home which is small or compact in size and affordable. This property segment generally attracts newly married couples, singles and young IT professionals or those migrating from other cities to Mumbai for job opportunities and cannot afford large and very expensive homes.

According to real estate consultants, the young people are approaching them more now for good houses as they are able to service loans for them by raising cash from non-banking financial institutions and private equity (PE) players at whopping interest rates of 25-30 percent a year as they have more year to work so they would be able to repay. Manju Yagnik, vice chairperson of a leading realty company, says, "In present time as there is a degree of uncertainty in the job with younger couple in terms of switching jobs often, coupled with rising property prices, has created a situation where buyers prefer to buy a smaller apartment with less risk involved. These apartments are a convenient and affordable option to buy or move in. The major advantage of buying a one-BHK or studio apartment is that it saves in utility and maintenance cost. In addition to lower costs, small houses may encourage a less cluttered and simpler lifestyle and reduce ecological impacts for the home buyers."

Real estate experts inform that, the city now has above 20 upcoming residential projects which are under several phases of construction, providing one-BHK and 1.5 BHK flats for sale in Mumbai and suburbs in the cost of Rs 7 lakh to Rs 60 lakhs. There are some specific areas which come under the mid-segment belt in Navi Mumbai and Mumbai which includes Airoli, Ghansoli, Rabale, Koparkhairane, Turbhe, and Kharghar, Mira Road, Bhayander, Vasai, Virar, Palghar and Panvel which the young people can afford.

Earlier, developers preferred to focus on large luxurious projects due to higher returns. But now given current market conditions and the huge unmet demand for smaller apartments, developers are once again catering to this potentially huge segment of the property market.

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