Globally, there is increasing demand for micro-living. A micro-home or a micro-apartment is a self-contained, single-bedroom unit, mostly meant for single occupancy.
These units are largely found in urban catchments and are sized anywhere between 50 and 350 sq. ft. These compact-sized swanky apartments are well established across America, Europe and Southeast Asian countries, where students and young professionals seek affordable housing close to their university/workplace as well in proximity to the cultural and entertainment hubs of the city.
As a concept, micro-apartments in India are set to redefine studio and one-bedroom units. For years, studio apartments and one-bedroom units have been an economical residential option for singles and young couples who are willing to compromise on space to own a house in a convenient location, rather than pay high rentals or take out huge loans to afford bigger houses.
However, micro-homes are not just about affordability. What sets micro-homes apart is their design, and the fact that they are equipped with all the modern comforts and amenities and are at a prime location. These units, designed to offer privacy with a separate bedroom and kitchen, make it popular with small families too.
Mumbai has been the frontrunner when it comes to the concept of micro-apartments and has seen offerings as small as 189 sq ft., going up to 320 sq ft. Amidst soaring realty prices in the space-constrained metro, these micro-units give young working professionals their best shot at owning an apartment in a central locality, without compromising on their lifestyle.
The micro-housing market is also seeing a spurt in demand in cities such as Bengaluru, Gurugram and Noida that have a large migrant population of working professionals with an annual income of more than Rs 8 lakh. The fact that in some of the recent launches, total inventories have been sold off within 72 to 96 hours, further testifies to the pressing demand.
Popular mainly among the younger generation, which prioritises location and lifestyle over space, micro-homes have huge potential in India, given the fact the country is the abode of around 440 millennials, the largest in the world.
The millennial population is not just expanding in size, but is also multiplying its economic footprint. As per a Morgan Stanley’ market research in 2017, India’s millennial population is expected to spend over $330 billion annually by 2020. Research has also indicated that around one out of every 10 millennial in India plans to purchase a home before a car. Additionally, over 35 per cent of millennials are expected to spend on housing in the next five years.
Many Grade-A developers are coming up with housing concepts that are custom-made for Indian millennials, specifically singles, young couples and students. These offer all the modern amenities and facilities that large-scale luxury residential projects offer, including a club house, community sports facilities, 24/7 security systems and retail outlets, et al. Many of them also have value-added services such as concierge and room services that can be availed on payment.
Apart from end-users, micro-apartments are also attracting the investor community in big numbers. Globally, data has suggested that rental returns in micro-units are generally 50 to 100 basis points higher than regular apartments. The higher returns stem from robust demand and better utilisation of the available resources. Likewise, the rates of appreciation are also expected to outperform larger-sized units. As it is a light investment, the entry barriers are limited and it can also be liquidated easily.