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Small, green homes are the charm for millennials written by Rakesh Reddy, published in The Pioneer. March 23, 2020

With globalisation, career advancement is moving professionals across cities and countries. Millennials are opting to buy small apartments as they are the fastest sellers on the resale market and provide the security and investment advantages of homeownership

 

Millennials are redefining the residential market in India and affordability and job mobility are the biggest factors affecting this sentiment. With rising urbanisation and soaring property prices in the prime real estate markets, millennials that do choose to invest in a house are increasingly looking at smaller apartments for their first home purchase. Globally, small apartments have been popular because they witness perennial demand from young working professionals who are always on the move. This trend is only recently gaining traction in urban India as young professionals migrate in large numbers to metropolitan cities for employment opportunities. A small apartment offers an acceptable trade-off between convenience and affordability and millennials prefer to own cosy, convenient and cost-effective homes. They attribute high value to flexibility, instead of settling in one location for an extended period. With globalisation, career advancement is moving professionals across cities and countries. Small apartments are the fastest sellers on the resale market so they provide the security and investment advantages of homeownership to the millennials.

 

While Mumbai leads the demand for studio and one bedroom, hall and kitchen (1-BHK) apartments, other metropolitan cities are joining the push towards 1-BHK and studio apartments to accommodate their growing migrant population. For young adults, studio apartments provide a popular alternative to conventional one 1-BHK and 2-BHK units. A studio apartment in India typically consists of a living area, a kitchenette and a bathroom. Combined with affordable property rates, studio apartments also offer reduced commuting times, due to their central location and low cost of maintenance. The inclination towards small apartments is so widespread that the average size of flats in metro cities has reduced over the last five years. The top seven Indian cities collectively saw average apartment sizes shrink by nearly 17 per cent between 2014 and 2018.

 

A major factor contributing to the shrinking home sizes across  cities in the country is the rising demand for budget-friendly housing. With property prices rapidly increasing, builders have been reducing flat sizes to align their offerings with a wider homebuyer audience. This has largely been driven by young adults choosing affordability, convenience and connectivity over an abundance of space.

 

There is a growing focus on the affordable housing sector among both homebuyers and builders. Attracted by growing job opportunities in metropolitan cities, consumer demand for affordable housing has increased exponentially.

 

Affordable housing projects were given a major impetus in the Union Budget 2017-18 by being granted infrastructure status. The &lsquoHousing for All&rsquo initiative aims to build 20 million affordable housing units across India by 2022. Since the affordable housing sector is the most incentivised segment for all stakeholders, many reputed builders are launching such projects.

 

Trust and ease of purchase also influence millennial homebuyers&rsquo purchasing decisions. The Real Estate Regulatory Authority (RERA) has the potential to be the most significant policy intervention in the real estate sector. The overall goal of RERA is to protect the interests of homebuyers in an efficient and transparent manner. Its implementation has introduced much-needed formality to the sector and boosted homebuyer confidence. Under RERA, builders will have to provide a timeline for construction and delivery which has been verified by a valid authority. Without approval, builders are not allowed to promote or sell any project. This has effectively weeded out unscrupulous players from the market and allowed only credible builders to flourish &mdash to the advantage of all homebuyers.

 

The reduction of Goods and Services Tax (GST) on under-construction and affordable housing properties is also a significant fillip for the real estate sector. These initiatives have encouraged house ownership among young professionals. Tax relief measures have also increased disposable income for such homebuyers, Furthermore, many banks are targeting the millennial demographic as the primary customer base, thus making it easier to obtain home loans, which carry additional tax benefits.

 

There is a growing trend among millennials towards energy-efficient and sustainable homes. They are aware that homes with reduced water and energy consumption, enhanced air quality, use of natural lighting and decreased carbon emissions have a significant impact on their health and that of their families. There is a concerted effort by builders to offer homes that optimise the use of local materials, minimise their impact on the local ecology and most importantly, are built to reduce power, water and material requirements.

 

As homebuyers and builders shift their focus towards environmental responsibility, the availability of green amenities is on the rise in the country including solar panels, rainwater harvesting facilities, waste management and high-efficiency lighting. Combining value-for-money, convenience and eco-friendliness, high-rise gated communities are fast becoming a popular option for millennials. Because, living in these gated communities has many advantages including strategic location, security, amenities and neighbourly appeal. Many communities offer amenities that are designed to provide an improved lifestyle for residents and increasingly, reputable builders are investing in modern, luxury facilities including clubhouses, fitness centres, swimming pools, spas, playgrounds and sports facilities. They are even integrating smart automation systems for added convenience and comfort.

 

Owing to the improved regulatory policies and rationalised tax structure, millennial homebuyers have a reinvigorated interest in the sector. The revived consumer confidence has stabilised the real estate market and laid the foundation for massive growth.

 

(The writer is Director, Aparna Constructions and Estates)