April 22, 2013
Single working individuals and newly-married
couples, trapped in an environment of rising property prices.
uncertain job market and a gloomy macro-economic scenario, are reconsidering the option of buying the more affordable one-bedroom apartments in Mumbai.
These home buyers, confident of good increments and job security in the past few years, had shunned such apartments and focused on buying at least two-bedroom apartments, or something even fancier. But things have changed since then, and these folks aren't ready to take on higher liabilities of owning bigger apartments, especially at current rates.
Property developers, who too stayed away from this segment due to lower margins, have sensed a change in mood and have spotted an opportunity in this unfancied one-bedroom category. Rustomjee Group,Marathon Realty, Hubtown, Nahar Group, NRDL, Kanakia Spaces and several other developers are all offering apartments in this category.
The product, which was a big hit in the 80s and 90s until the economy offered more opportunities and higher pay-packages, is making a comeback of sorts. "Buyers are very cautious right now, they are buying smaller units. The mindset is similar to pre-1995 when homebuyers were not willing to stretch themselves as confidence about their income levels was low," says Mayur Shah, MD, Marathon Group that has been developing realty projects in Mumbai since 1969.
It was in the late 1990s, with tax sops on housing loans thrown in, people started buying larger apartments, which was in sharp contrast to their earlier approach of buying a house with own savings or family support, and therefore mostly ended up buying one-bedroom apartments. "Ultimately, budget plays a very important role in this decision.
Realty prices have been going up for long making it unaffordable. Buyers are not sure if their salaries will rise in the same fashion as they did earlier," says Shah, while reasoning the revival of one-bedroom units. Around 65% of Marathon's new 18-storey residential project near Mulund, a Mumbai suburb, will comprise 1BHKs. For developers too, this seems to be an easy remedy to their liquidity worries.
"Right now, turnover of such smaller apartments is high. Developers are also facing tight liquidity situation, therefore this is the best available solution for improving liquidity rather than depending on private financiers," said Manju Yagnik, vice chairperson of Nahar Group.
For long, developers have been focusing on apartments with at least two bedrooms given the high-margin possibility, but are now considering even lower margin vertical. "Margins in this segment are low, but given the high-volume play, many developers are moving back into this as a sure-fire sales proposition, with almost instant absorption if the location is right.
uncertain job market and a gloomy macro-economic scenario, are reconsidering the option of buying the more affordable one-bedroom apartments in Mumbai.
These home buyers, confident of good increments and job security in the past few years, had shunned such apartments and focused on buying at least two-bedroom apartments, or something even fancier. But things have changed since then, and these folks aren't ready to take on higher liabilities of owning bigger apartments, especially at current rates.
Property developers, who too stayed away from this segment due to lower margins, have sensed a change in mood and have spotted an opportunity in this unfancied one-bedroom category. Rustomjee Group,Marathon Realty, Hubtown, Nahar Group, NRDL, Kanakia Spaces and several other developers are all offering apartments in this category.
The product, which was a big hit in the 80s and 90s until the economy offered more opportunities and higher pay-packages, is making a comeback of sorts. "Buyers are very cautious right now, they are buying smaller units. The mindset is similar to pre-1995 when homebuyers were not willing to stretch themselves as confidence about their income levels was low," says Mayur Shah, MD, Marathon Group that has been developing realty projects in Mumbai since 1969.
It was in the late 1990s, with tax sops on housing loans thrown in, people started buying larger apartments, which was in sharp contrast to their earlier approach of buying a house with own savings or family support, and therefore mostly ended up buying one-bedroom apartments. "Ultimately, budget plays a very important role in this decision.
Realty prices have been going up for long making it unaffordable. Buyers are not sure if their salaries will rise in the same fashion as they did earlier," says Shah, while reasoning the revival of one-bedroom units. Around 65% of Marathon's new 18-storey residential project near Mulund, a Mumbai suburb, will comprise 1BHKs. For developers too, this seems to be an easy remedy to their liquidity worries.
"Right now, turnover of such smaller apartments is high. Developers are also facing tight liquidity situation, therefore this is the best available solution for improving liquidity rather than depending on private financiers," said Manju Yagnik, vice chairperson of Nahar Group.
For long, developers have been focusing on apartments with at least two bedrooms given the high-margin possibility, but are now considering even lower margin vertical. "Margins in this segment are low, but given the high-volume play, many developers are moving back into this as a sure-fire sales proposition, with almost instant absorption if the location is right.
1 BHK must b brought in action by the Developers for the newly wedded couples, as per the growing rates. Concept must need to be focused.
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Ahmedabad, Gujrat