Recording more than 50% quarterly increase in demand for modern flex room configurations such as 1.5 BHK, and about 100% for 2.5 and 3.5 BHK units, the concept of flex rooms is in the limelight across the top six cities once again. Is it due to an increase in the segment of keen homebuyers willing to splurge extra money or the builders tweaking their offerings? Let’s find out.
Since its outbreak, COVID-19 has defied almost every prediction especially when it came to what turn the Indian market would take. Given the challenges people have faced during the pandemic on the home front, the desire of owning a home is now strongly etched in the buyers’ hearts. Owning a home that earlier was largely considered a “desire” by the rent-happy millennials has now converted into an exigent requirement. Over the past few months, this has further pushed more prospective home buyers to step into the residential market looking for their safe havens.
To many of us, the property sector may appear almost the same, as it were before the pandemic. However, it isn’t. The nature of home buyers’ demand has shifted and so have the developers’ offerings. The pandemic crisis has changed quite a few markets and sectors forever, real estate being one of them. At Square Yards, we take a deep dive into understanding how the market for additional/ flex rooms has changed and if they are here to stay or not.
No one can deny the fact that while the pandemic urged most of the families to stay together under the same roof, on one hand, it also emphasized the need for upgraded larger homes to ensure more space, on the other. As per Square Yards online search trends, searches for flex-room configurations saw a significant rise this year. A whopping rise of 54% for 1.5 BHK, 150% for 2.5 BHK, and 120% for 3.5 BHK was registered across the top six cities in July-Sept 2021 quarter compared to the April-June 2021 quarter. Demand for flex rooms, which was once latent, came to the front more prominently as several combining factors are now driving the residential sector.
Are home buyers up for taking the plunge of faith?
Homebuyers who were a little hesitant about expanding their budget in pre-covid times seem more willing to do so, considering various government-aided monetary benefits along with developers’ willingness to offer residential units that come with additional flex/study rooms. More than 60% rise in Q-on-Q demand for 2.5 and 3.5 BHK in the top six cities clearly showed the need for more such units. Thus, buyers who earlier planned to invest in 2 BHK and 3 BHK are expected to upgrade to 2.5 BHK and 3.5 BHK units respectively in upcoming quarters, even if this desire comes at an extra price.
Trend for additional/flex rooms across top cities
Though the rise in demand was observed across all the top six cities, the distribution for different home units varied considerably. For instance, more than 200% Q-on-Q rise in demand was recorded for 2.5 BHK in cities namely Pune, Hyderabad, and Bengaluru. Apart from that, these three cities also witnessed about 70% quarterly rise in demand for 3.5 BHK units, approbating the gradual shift among home buyers’ preference over the past two quarters.
However, for Noida, unlike other cities, 3.5 BHK was the most preferred configuration type by home buyers constituting about 200% rise in demand in July-Sept 2021 quarter, as compared to April-June 2021 quarter. One of the underlying reasons for this can also be the easy availability of affordable units that the region offers without compromising on the space.
For MMR, however, the other extreme holds true. Attributed to the skyrocketing prices in MMR, the quarterly rise in demand for additional/flex rooms remained comparatively low recording about a 50% increase in demand for 1.5 BHK and only 68% for 2.5 BHK in the third quarter of 2021.
Unlike other cities, where demand for additional/flex rooms was skewed in favour of one of the three configurations online home search trends were relatively more uniformly distributed in Gurugram with 2.5 and 3.5 BHK units registering almost an equal rise in demand of more than 70%.
Developers willing to tweak their product offering
Considering the constant juggle and uncertainty home buyers went through during the pandemic, the rise in demand for larger units and additional flex rooms was the only certainty. Taking notice, many developers who were earlier a little reluctant to tweak their offerings, now seemed more willing to create space for additional small rooms within the same unit. Despite the availability of most of the inventory in the 2 BHK segment for the past quarters, an increase in the supply of 2.5 and 3.5 BHK units is highly expected in the upcoming quarters. As developers are now more cognizant of changing buyer’ demands and dwindling market trends, they are quite willing to tweak their offerings to match up to the home buyers’ expectations.
Affordability continues to be the main tenet
Except for Noida, where 3.5 BHK units were more in demand, 2.5 BHK units emerged as the most preferred configuration in all other top cities. And why not? Be it from the affordability viewpoint or providing the perks of additional space, 2.5 BHK fulfills both. Affordability has always remained the main ground for a major section of the home buyers, and it has been further accentuated by the covid-induced scenario which emphasized the need for redefining affordable residential units more than ever before. Amid such emerging trends, it is highly unlikely to negate that even though additional/flex rooms witnessed a rise, affordability is still driving the home buyers’ sentiments at large.
In the present scenario where homebuyers are on the lookout for spacious yet affordable units that are flexible yet safe havens, demand for flex rooms is here to stay. With lifestyles of people in top cities becoming increasingly mobile and flexible, a dedicated space that can be used for different purposes such as office space or as a study room is likely to become a “necessity” rather than just being a preference/alternative.
