At a time when home buyers in the north and west are opting for smaller formats that fit their pockets, Chennai has continued its aversion to 1BHK units.
For Chennai home buyers, small is definitely not ‘in’. A close look at the demand and supply data of Chennai property market reveals that the market is not too keen on smaller housing units. As per the data with Magicbricks, demand for 1BHK units in the city has consistently remained below or up to 10 per cent in the last few years. Supply in the segment has also remained low.
So, are buyers in Chennai more pompous? Does buying a 1BHK hamper their pride? Or is it simple market logic to not buy 1BHK units. Well, the second option seems more likely.
“Chennai is largely an end-user market and thus witnesses higher demand for the more usable 2 and 3BHK units where the buyer can move in with his or her family. A typical Chennai buyer prefers to buy at least a 2BHK unit as it would take care of the growing family in future. However, with the advent of the IT and ITeS, there has been an influx of young population in the city. This might lead to a demand in this segment albeit it will take a long time as most youngsters prefer rental accommodations,” says Kanchana Krishnan, director, Knight Frank, Chennai.
The pricing also makes it more appealing to buy a larger unit. For instance, on OMR, which is probably one of the most supplied localities in Chennai, the difference between the price of a 1 and 2BHK unit is not much. As per data with Magicbricks, a 1BHK apartment can cost Rs 20-28 lakh, along the OMR, while a 2BHK would cost Rs 25-35 lakh. “Buyers do not mind paying a little extra for a larger unit. This is not the case in cities like Delhi and Mumbai where one would have to shell out a fortune to upgrade from a 1 to 2BHK unit,” says Maneesh Gupta.
As demand in the segment is low, developers have also stayed away from constructing these units. “Other than the 10 per cent mandatory norm of constructing EWS (Economically Weaker Section) units, developers in medium and large scale projects choose not to construct 1 BHK apartments mainly due to lack of robust demand for such homes,” adds Krishnan.
It is thus apparent, that 1BHK units would have to wait a little longer before being accepted by the Chennai realty market.
Source: Times of India Chennai / Sruthi Kailas, Magicbricks.com Bureau