Of the total of 884 projects launched in 2020 across the top 7 cities of the country, just 130 projects offered studio apartments – a 15% share.
The growth curve of studio apartments seems to have hit the reverse gear for the first time in 7 years, as of the total of 884 projects launched in 2020 across the top 7 cities of the country, just 130 projects offered studio apartments – a 15% share, according to ANAROCK research.
Until recently, in fact, 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 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 wisdom in living close to key employment hubs.
Commenting on this trend, Anuj Puri, Chairman, ANAROCK Property Consultants, said, “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,” said 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%.”
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 and 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. However, 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.