Way of living is changing dramatically and in the current scenario compact home is the new trend. One of the growth drivers of compact homes is young population who are contributing significantly to the GDP of the nation.
Today, some of the top aspirations of Gen Y include home-ownership. Surplus disposable income, ease of availing home loan and the importance given to personal space, have fuelled their dream of owning a home. That was not the case a few decades back. This generation’s need for a home is quite different from that of the previous generations. Their specifications are simple – a compact abode, which takes care of their requirements; a home that is located at a striking distance of all amenities and facilities, and more importantly, a residential unit that doesn’t go burden their wallets.
Compact homes perfectly match the requirements, such as privacy and desire to own a home within the budget of the Gen Y. This trend has contributed to the dimensional changes to existing homes, as the demand for studio, 1 BHK and 1.5 BHK homes in metros are soaring.
In metros, single working professionals, especially are opting for either shared accommodation, apartments (2bhk and 3bhk) or paying guest facilities. Married couples tend to rent homes a little far away from their workplaces (because of the high rents in CBD and economic hubs). Investing in a compact house offers dual benefits – Firstly, they save on the rent being paid. Secondly, the new home is an investment instrument because of returns annually on account of appreciation of capital values of the property. The ROI will be useful when the property owner plans to buy a bigger house (in the latter part of his/her career/life). From an investment perspective too, it is a profitable proposition, as one can gain from the rental income.
In the last five to eight years, there has been a substantial increase in urban migration in India as the Gen Y is relocating to different cities in search of better job opportunities and livelihood. IT/ITeS is the main driving force and most of the buyers are below 30 years. As most investments are funded by home loans, smaller apartments mean that EMI outflows are manageable. Smaller homes also have lower maintenance costs.
In essence, compact home is the new buzzword and its market will only grow bigger in the coming years. With more awareness, long term benefits and better resale value, compact housing will emerge as a stronger segment.
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