1BHKs become popular in Chennai

Chennai

With soaring property prices and high disposable incomes among young working professionals, one bedroom flats (1BHKs) are gradually becoming popular among end-users and investors alike.

Chennai, as any real estate expert will tell you, has always been an end-user-driven market. Which is precisely why 2BHKs (bedroom hall kitchen) and 3 BHKs continue to be popular here, thanks to the fact that Chennaiites have conventionally moved in with their families and preferred larger spaces.

However, parallel to the booming market for 2 and 3 BHKs, a small but steady market for 1 BHKs has evolved over the last few years. One of the reasons cited is the CMDA’s (Chennai Metropolitan Development Authority) mandate to reserve 10% of the space in larger projects for economically weaker sections (EWS). As Rajkumar Kamdar, Director, Prince Foundations, points out, “According to the provisions under CMDA’s Second Master Plan, projects spread across 2.5 acres or more must reserve 10% of their area for construction of 45 sq m units (or less) for EWS. Only one bedroom apartments can be constructed in that space. And since 2 BHKs and 3 BHKs are out of reach for the EWS (and the general public, at large), most of them feel that it makes economic sense to purchase a one bedroom apartment.”

But do these apartments necessarily cater to the EWS category? How many of them can really afford an apartment, no matter how small? Mehul Doshi, MD of Doshi Builders, believes that it depends on the location of the project. “One bedroom apartments in the heart of the city are definitely not affordable. But those in the suburbs and outskirts of the city are well within their reach,” he explains. Doshi clarifies that CMDA’s norm classifies these apartments based on size, not necessarily on income levels of buyers. So who are the buyers? Deepak Shah, Senior VP – Sales and Marketing, Prestige Estates Projects Ltd, says, “The buyer profile includes newly married couples, single working professionals from the IT sector, etc.”

These apartments also come to the rescue of bachelors (from the city and other places) who find it difficult to rent a place in the city. Suresh Jain, MD, Vijayshanthi Builders, says, “With the IT boom and the consequent influx of MNCs, owners/developers have been leasing out one bedroom apartments on OMR, GST, etc, to companies. Besides, a lot of young working professionals (from other cities) purchase one bedroom apartments in these areas and dispose of it once they leave the city.” Kamdar agrees that this is becoming a prominent trend. He says, “It serves as a small ticket investment for these working professionals. They pay EMIs instead of rentals, and since these apartments do not cost much, they do not feel financially burdened. They can either decide to keep the apartment and rent it out, when they leave, or sell it as per the market value.” Besides, with changing lifestyles and family structures, the single bedroom concept has found many takers from the younger generation.

As Deepak points out, “The emergence of nuclear families, growing trend of single men and women preferring to stay on their own, high income levels of buyers and the influx of people from other states who are keen on investing in apartments here, as opposed to paying rent, has led to an increase in demand for one BHKs.”

Whether as an investment or rental option, the saleability of one bedroom apartments cannot be overlooked. Take the Prestige Group, for instance. Their new project Bella Vista in Porur has 600 1 BHK apartments, each of which is about 600 sq ft in size. These apartments cost 25 lakhs onwards. Similarly, Osian Chlorophyll, by SPR &RG Constructions, in Porur has 232 single bedroom apartments (665 sq ft each) costing 29.9 lakhs onwards.

Prince Foundations’ Prince Village in Tondiarpet sold out its one bedroom apartments on the first day of its launch. Almost all projects have recorded good sales of one bedroom apartments. While exclusive projects for single bedroom flats may not be in the offing anytime soon in Chennai, developers are waking up to the potential of this segment. Mehul Doshi says, “We launched Doshi Etopia II on OMR a few months ago, and this project has 40 single bedroom apartments, most of which are sold. We’re planning to launch a project consisting of studio apartments and 1 BHKs in Perungudi very soon.”

Deepak Shah is of the opinion that the sector is set to grow further. He says, “As the city is on the fast track to growth and industrialisation, thanks to the booming IT, service and automobile sectors, demand for smaller houses, especially in the age group of 25 to 30, will grow.”

While many developers believe that single bedroom apartments are in vogue, thanks to CMDA’s mandate, some like Rajesh Babu, chief real estate consultant, RECS Group, are sceptical. He points out that single bedroom apartments were popular decades ago, when the apartment concept in the city came into existence. “With the introduction of G (ground floor) +3 or multistoried buildings, 2 and 3 bhk apartments grew in popularity. However, now, as per the second master plan, single bedroom flats have made a comeback of sorts but their proportions continue to be less and they cater to a small section of buyers. It will take ages for our city to even match the volumes that Mumbai, for instance, has recorded, in terms of single bedroom apartments that are popular there for a variety of reasons,” he explains.

Sandeep Pantvaidya, VP – Marketing, Sales and CRM, SPR & RG Constructions, also agrees that 2 and 3 BHKs continue to be the preferred choices. “While there is an opportunity to rent or sell single bedroom apartments as serviced apartments, it is still in its nascent stage. There isn’t much scope for further growth in this sector, otherwise.”

Opinions are divided on the growth prospects for single bedroom apartments in the city. While comparisons to the market in Mumbai may be unrealistic, at the moment, it is however, clear that the needs of a certain section of buyers are being addressed through single bedroom apartments. Where is it projected to go from here? Only time will tell.

Source: Times Property, Times of India, Chennai