The studio spurt began a few years ago. Since then it has only got more momentum. As people are shedding their inhibitions and graduating in thought, they are embracing the concept more readily. Studio apartments in business centers, such as Chennai, Bangalore, Gurgaon and the western suburbs of Mumbai enjoy prevailing demand. These apartments have witnessed a capital appreciation of 15-20% a year in the last 4-5 years and we are still seeing the growing demand in IT dominated areas. And yes, the studio apartments are taking over the 2 BHK formats for reasons more than one.
Why studio apartments?
Let’s face it. Real estate will never come for peanuts. When budget is a constraint, yet the heart does not stop wishing for great location, lifestyle, convenience and all things nice, a studio apartment ends your search. Since the yield is still limited and the demand graph is constantly on an up, studio apartments also pose as investment superstars that can offer a quick buck in terms of appreciation as well as rental income. Resale of these apartments is also easy for the same reasons.
Who would jump at a studio apartment?
Studio apartments work well for singletons. A growing number of this segment is looking for small accommodation formats for various reasons. Students are looking for private yet easy-on-the-pocket living options that are close to the university as well as city action. All they need is a place to crash in the night anyway! Young working adults might share some of these reasons too. Having to prove themselves in the corporate jungles juices out most of their productive time at work. To add to their list of reasons, ease of relocation makes studio apartments an attractive option. Easy to wrap up, sell off or even rent out.
Next in line are couples. Young couples who have just begun to set up a life together and would eventually look at larger home formats love the studio apartment concept. Inexpensive and easy to maintain! Not to ignore the parents of students pursuing higher education abroad. Proximity to the market and medical facilities would be an added criteria for them.
The demand for studio apartments comes primarily from software professionals and manufacturing sector executives who have generally spent over a year stationed in a metro and decide to pay EMIs on an affordable living unit rather than shell out high rents for flats or serviced apartments. Developers are looking at supplying inventory of studio apartments and 1BHK flats as a way to increase sales and generate some much-needed liquidity in the market.