Small is big, as micro homes gain traction in metro cities

With the geographical boundaries of cities expanding and their population growing, small-sized homes are once again in demand. We look at the advantages of such ‘micro homes’ and who should invest in these

‘Micro homes’ are gaining popularity owing to the rapid rise of population and space crunch in urban India. With rising rents and housing becoming expensive over the years, home buyers are opting for homes that are smaller in size but well within their budget. A micro home is a home that is small in size, cost-effective and easy to maintain.

These homes are ideal for people who prefer location to ample space, says Nandan Piramal, director – sales and marketing, Peninsula Land Ltd. “The residential real estate segment has witnessed considerable demand, from professionals who constantly look out for apartments, either for residing or investment purpose. Micro homes, which were labelled as down market are now becoming a game-changer for the real estate industry. Many corporate real estate developers are foraying into this segment, which is providing a tremendous boost to the sector, along with an increase in demand for these homes,” adds Piramal.

 

Hotspots for micro homes in India

In the first decade of this millennium, property prices spiralled, fuelled by a frenzy of lifestyle developments aimed at the increasingly demanding home buyer, points out Vivek Rathi, senior vice-president, research, Knight Frank.

“While prices per sq ft rose, the spurt in ticket-sizes of apartments was more pronounced, as developers heavily bet on increasingly larger units. The average house price to income ratio, was as high as 11 in the Mumbai Metropolitan Region (MMR) at the close of that decade, which meant that a family had to shell out 11 times its annual earnings, for an apartment in Mumbai. This ratio was similarly high at 6 and 5.6 times, for the National Capital Region (NCR) and Bengaluru, respectively. As the cycle turned, in a response to this stretched affordability, developers reacted by reducing apartment sizes, among other things. Smaller homes became a befitting response to counter the affordability challenge country-wide. In the case of Mumbai and Pune, home sizes shrunk by 24% during 2011-2018. The shrinkage was 18%, 17% and 8% for Bengaluru, Kolkata and NCR, respectively,” Rathi elaborates.

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Besides Mumbai, cities like Pune, Bengaluru, and Noida are seeing a spurt in the demand for micro homes, adds Piramal. “Pune’s real estate market has benefited, not only from its proximity to Mumbai but also the presence of IT/ITeS, manufacturing and services industries. The construction activity and price growth in developed regions of the city, have pushed spill-over residential demand to more affordable areas like Gahunje, Wakad, Talegaon, etc.,” explains Piramal.

 

Factors that have boosted the demand for micro homes

1. Location of the property

As metro cities expand with increasing population, so does the corresponding establishment of civic and social infrastructure. “Nevertheless, a majority of people prefer to stay in the heart of the cities, for various reasons, such as connectivity, familiar environment, access to social and cultural amenities, proximity to workplace and schools, etc. With cost being a major factor in such locations, families prefer to invest in micro homes. Smaller unit sizes also call for efficient space management, which is preferred by contemporary families,” states C Alankrutha, architect, Navin’s (real estate developers, Chennai).

 

2. The rise of nuclear families

Nuclear families are now the order of the day. As the size of such families is small, the space requirement becomes less, compared to a joint family. “The typical nuclear family today has a different lifestyle and their decision making on buying homes, has evolved over time. Parents consider the needs and requirements of their children, in addition to the size and price of the home. Besides nuclear families, working singles, or old retired couples, are potential buyers for micro or compact studio homes,” adds Alankrutha.

 

3. Availability of amenities

Modern clients also look for amenities such as club house, games area, jogging tracks, swimming pools, children’s play area, etc., which cater to their aspirations and needs. In this context, luxury micro homes provide for the maximum utilisation of available space, design acumen and comfort. “Buyers want high-quality compact units, without any compromise on facilities and hence, look for developments with all the lifestyle-centric services and good connectivity. Even for high-end home buyers, these boutique luxury flats have an appeal, due to its location, financial feasibility and comfort,” concludes Shubham Jain, managing director, JP Infra Mumbai Private Limited.

 

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