Millennials powering demand for 2 BHK and micro apartments this festive season
A survey that takes stock of the property market sentiment during the festive season compiled by 360 Realtors, India’s leading real estate consulting company, indicates a marked preference for smaller, affordable units like 2BHK and micro apartments. This trend is visible across major metros – Gurugram, Noida, Mumbai, Pune and Bangalore and is driven by the participation of millennials between 25 to 35 years of age, who account for 36% of prospective home buyers today. According to the survey, more than 60% of the homebuyers are attracted by the festive offers and schemes.
While the 35 to 45-year-old age group is the obvious front runner when it comes to prospective buyers, interestingly a growing class of buyers aged below 35 years is deepening their foothold in real estate purchases. Buoyed by attractive home loan rates and offers, millennials are expressing interest in buying 2BHK, 1BHK and studio apartments as they fall into their budget owing to festive offers. Around 75% of these purchases are for personal usage while the remaining 25% are investment driven. Another interesting segment is of customers below 25 years of age which constitute 7% of prospective buyers and have shown an appetite for studio, 1 BHK and small 2 BHK apartments.
The first choice of prospective buyers across all age groups are 2 BHK units. 2BHK units are becoming increasingly popular among nuclear families and millennial buyers as they suffice their needs and are moderately priced with several developers coming up with smaller carpet area options (900 to 1350 sq. ft) in the category. Demand for 1BHK and studio apartments is also on the rise.
In terms of the budget, units priced between INR 40 to 80 Lakhs are most preferred, followed by micro-apartments and smaller 1 BHK which are generally priced between INR 30 to 40 Lakhs. Going forward, buyers are expected to continue to gravitate towards smaller units.
According to the survey, around 65% of the buyers plan their property purchases between the festive months of September to November due to attractive offers and schemes. Developers offer a range of financial schemes such as discounts in payment plans, rebates in parking charges etc. Likewise, developers also float a lot of non-financial incentives such as free gift vouchers, mobile phones, cars, foreign trips etc. Some developers even go the extra mile and offer free fittings such as split type AC, wooden furnishing, modular kitchens etc for bookings done during the festive season.
According to Ankit Kansal, Founder and MD, 360 Realtors, “The last 3 to 5 years have seen a decline in the millennials’ interest in home buying owing to the fluctuating real estate market. However, attractive payment plans and affordable housing units coupled with reforms like RERA are driving young buyers to the market in a big way. This is a great sign for Indian real estate. Interestingly, the upbeat market sentiment is also drawing the attention of investors in sizeable volume. Roughly, one-fourth of the market is currently driven by investors.”