Studio Apartments’ Growth Curve Hits Reverse Gear for 1st Time in 7 Years
Mumbai: Until recently, millennials were consistently driving up the demand for studio apartments in the top 7 cities - to such an extent that, over the last 7 years, developers customarily offered this configuration in their projects. In fact, studio apartments' share in new launches had been rising y-o-y since 2013. However, the COVID-19 pandemic year of 2020 saw a sudden reversal of this trend.
Latest ANAROCK research reveals that out of the total 884 projects launched in 2020 across the top 7 cities, about 130 projects offered studio apartments (a 15% share). In contrast, of the 1,921 projects launched in 2019, around 368 (19%) offered studio apartments.
A studio apartment fundamentally consists of a single large room multitasking as the living room and bedroom, with a small kitchenette. Only the bathroom is separated by a wall. Studio apartments have traditionally been favoured by bachelors, students, newly married couples beginning their homeownership journey with a 'starter' home, and business travellers who frequently visit a city for work.
Their small size and no-frills presentation notwithstanding, studio apartments became the favoured option for those with constrained budgets who nevertheless saw the wisdom in living close to key employment hubs.
Anuj Puri, Chairman – ANAROCK Property Consultants says, “The studio apartments trend so far can be clearly plotted. Out of the total 2,102 projects launched in 2013 in the top 7 cities, just 75 projects (or 4%) offered studio apartments. The share increased to 5% in 2014, followed by a y-o-y increase in the overall share of projects offering this configuration. This growth trend remained consistent till 2019 when the share was highest at about 19%.”
“In 2020, the COVID-19 pandemic hit, bringing with it the uniquely new WFH and study at home compulsions requiring larger homes,” says Puri. “The onus also suddenly shifted from expensive central locations to the more cost-effective suburbs and peripheries. In a single year, studio apartments' new supply share dipped to 15%.”
City-wise Trends
The studio apartments phenomenon was historically strongest in West India, with MMR and Pune predominantly driving the trend. Of the total projects with studio apartments launched in the top 7 cities between 2013-2020, MMR and Pune together accounted for a massive 96% share.
The average size of studio apartments (on built-up area) was highest in NCR (400 sq. ft.) and lowest in MMR (300 sq. ft.).
In contrast, the southern cities of Bengaluru, Chennai, and Hyderabad had never caught the studio apartment bug - just 34 projects in these three cities had this compact configuration in the same period.
Rising Y-o-Y Supply
The top 7 years displayed a clearly-defined growth trend in terms of the number of projects offering studio apartments in the last seven years. Unsurprisingly, MMR has the highest supply share among all top 7 cities in this period. Of 5,442 projects launched in MMR between 2013 and 2020, at least 25% offer the studio apartment option. The numbers are less spectacular in other cities.
- In 2013, out of a total of 2,102 projects launched in the top 7 cities, just 75 projects offered studio apartments – a mere 4% share
- In 2014, the overall share increased to 5% - of 2,812 projects launched, almost 151 projects offered studio apartments
- In 2015, the top 7 cities saw nearly 2,635 projects launched, of which 190 projects (or roughly 7%) included studio apartments
- In 2016, nearly 1,911 projects were launched in top cities, of which 128 projects (7%) incorporated studio apartments
- In 2017, a total of 1,826 projects were launched across the top cities, and 197 (11%) had studio apartments
- In 2018, the total share increased to 18% - of 2,477 projects launched, about 446 offered studio apartments. In terms of the number of project launches in a year, 2018 had the highest saturation of studio apartments.
- 2019 saw approx. 1,921 projects launched, of which 368 projects (19%) offered studio apartments
Finally in 2020, out of a total of 884 projects launched throughout the year, just 130 projects had studio apartments – a 15% share. 2020 kick-started a trend reversal wherein larger homes - spacious enough to accommodate home offices and online study spaces for children - began to be in higher demand, and developers accordingly amended their new supply configurations.
|
Year |
Total No. of Project Launches in top 7 cities |
Overall Share of Projects with Studio Apts. |
|
2013 |
2,102 |
4% |
|
2014 |
2,812 |
5% |
|
2015 |
2,635 |
7% |
|
2016 |
1,911 |
7% |
|
2017 |
1,826 |
11% |
|
2018 |
2,477 |
18% |
|
2019 |
1,921 |
19% |
|
2020 |
884 |
15% |
Source: ANAROCK Research
