Compact Comfort : The Enduring Studio Apartment
This blog highlights the emerging preference for studio apartments and explains how and why this trend has endured, even through tough market times
Technically, studio apartments comprise of single large rooms that encompass the bedroom, living and dining areas, with compact kitchens and bathrooms attached. When they first made their appearance on the Indian residential landscape, studio apartments found favour, largely with bachelors and small families who spent most of their time at work.
Even today, the demand for studio apartments comes primarily from software professionals and executives from the manufacturing sector. Such professionals have generally spent over a year, stationed in a metro and find that they prefer to pay EMIs on an affordable, maintenance-friendly living unit, rather than pay high rents for flats and serviced apartments.
There is a steady and inflexible demand for studio apartments, both, in the metros and tier-II cities. These apartments are usually the first to be sold out in a residential project that features them. Without doubt, they are the most cost-effective residential options for people who prefer to own rather than rent, especially in projects close to workplace hubs. Another factor that drives demand for such units is the ease with which they can be rented out or sold at a profit, in the secondary market. This also makes studio apartments a prime target for investors. Moreover, studio apartments do not attract much maintenance costs and make for hasslefree purchases as well as resale.
The typical Indian home buyer prefers larger homes and will go in for more generous formats whenever possible. However, the rate of property price escalations in our primary cities has narrowed things down considerably. Simultaneously, proximity to the work place remains a priority in an evolving economy and the studio is the logical choice for those who cannot or do not choose to buy larger units.
Studio apartments are also popular with mid-management level buyers who tend to reside in certain cities for extended periods. Rather than paying for a serviced apartment or a hotel room, they prefer to acquire studio apartments and sell them off when they no longer need them. There is also a lot of demand from single working individuals and newly married couples who need to set up a home immediately and eventually, upgrade to larger sized homes later on. As already stated, the demand for such units in both, the primary and resale market, is consistently high.
When the downturn hit the Indian real estate market, practically the only residential configurations which continued to see demand were studio apartments and cost-effective one-BHK flats. The demand for larger units has meanwhile, revived considerably but studio apartments are still the fastest moving products in the market. The margins are low but it is definitely a high volume vertical and many developers bank on such configurations as a sure-fire sales proposition, with almost instant absorption, if the location is right. This provides them with instant working capital. The demand is even greater for furnished studio apartments and many developers offer these as well.
The current demand for studio apartments is percolating down from the equally high demand for serviced apartments and is still picking up from there. Eighty per cent of the overall demand for studio apartments in cities like Mumbai, Delhi NCR, Bangalore, Pune and Chennai, is driven by software professionals and recently, relocated manufacturing sector executives. Price points vary according to city, location and amenities offered but generally range between Rs 12-35 lakhs.
Definition of a Studio Apartment
A studio apartment is a 1-room apartment with a separate bathroom and kitchen equipment in the main living area. Their small size and limited storage necessitates some planning and organization, but studio apartments are so affordable to rent and operate that they allow people to live in locations they couldn’t otherwise afford. Many studio dwellers enjoy the efficiency, simplicity and convenience of their streamlined studio homes.
A studio apartment requires some pre-planning in order to best use the space. With such limited area, everything from furniture size to bulk purchases have to be considered carefully. Entertaining in one room can be a challenge, and cleaning and organization need to be priorities. Many studio dwellers find that multi-purpose furniture and a healthy dose of creative thinking help them make the most of their spaces
Category : Flatons Advisors Blog