Over the past few decades, real estate has emerged as an important investment asset. However, this investment, depends on healthy capital appreciation over a long-term period. Real estate also tends to be illiquid and … READ FULL STORY
The post One-BHK apartments are always in demand for rent, in Mumbai appeared first on Housing News.
Over the past few decades, real estate has emerged as an important investment asset. However, this investment, depends on healthy capital appreciation over a long-term period. Real estate also tends to be illiquid and involves a holding period.
Due to these reasons and the high prices of properties in Mumbai, customer prefer to opt for 1-BHK flats, instead of 3-BHKs. “The cost of a 1-BHK is less and it is easy to sell and give on rent. When it comes to renting flats, students, small families, working professionals, couples, etc., always prefer 1-BHKs. Therefore, the demand for such units is more. Moreover, the monthly maintenance is low for 1-BHK. So, it is a good investment option,” says Dhaval Ajmera, director of Ajmera Realty.
Hotspots for one-bedroom homes in Mumbai
With high property prices in the central areas of cities, people also prefer to buy properties in the outskirts, as they are cheaper and offer better infrastructure.
“Developers are targeting places like Kalyan, Thane, Navi Mumbai and Borivali, for 1-BHK homes, as the demand in such places is high. Buyers in the age group of 25-30, demand 1-BHK units, owing to their financial constraints and affordability of EMIs. Developers cannot afford to ignore this segment, as the walk-ins from this group is very high. Consequently, developers are trying to ensure that 1-BHK is one of the configurations that they offer, along with two and 3-BHKs, in their projects,” adds Ajmera.
Surabhi Arora, senior associate director – research, Colliers International, adds “We expect the demand for such apartments to rise, with affordability becoming one of the prime factors for investment. Due to the increase in property prices and scarcity of land for development, the average apartment size is consistently shrinking, especially in cities like Mumbai.”
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Prices for 1-BHKs in Mumbai
In Mumbai, where real estate is one of the most expensive commodities, buying a 1-BHK is always a better option for a new investor, than a 2-BHK.
“In south Mumbai a one-bedroom house will cost around Rs 1.3-1.8 cores. In the western and eastern suburbs of Mumbai and Navi Mumbai, the price is around Rs 25-75 lakhs, while two-bedroom homes start at Rs 85-90 lakhs and go up to Rs 4-5 crores. However, in some micro markets, the price difference between the two configurations, may only be Rs 10-15 lakhs. A 1-BHK apartment, when purchased in a premium location at the right time, can give a rental yield of as high as four per cent. So, for an investor, this makes for a fruitful business decision,” maintains Aarti Sharma, managing partner of real estate advisors, Brecothouse.
Advantages of one-bedroom homes, over other configurations
Besides being an affordable option in terms of purchase and also offering rental yield, 1-BHK homes are also relatively easier to sell. Moreover, with Mumbai witnessing a steady influx of working professionals who need home on rent, this affordable configuration serves their purpose perfectly. “In the past, while salaries increased, so did inflation, as well as the interest rates from banks. Now, banks have reduced their lending rates, making it easier to buy homes. Consequently, new investors are ready to buy affordable configurations, while continuing to stay in rented apartments in the same city,” adds Sharma. With steady demand in the secondary market, as well as for ready-to-move-in products from developers, where the taxes are lower, one-bedroom units remains a huge segment in the property market, for buying and renting.
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