Studio Apartments Losing Appeal

The fast growing segment of studio apartments in the pre-covid times , has got a hit with home buyers preferring to buy bigger and spacious homes , keeping in mind the post-covid considerations of health safety and requirement of indoor spaces like home office .

The overall supply share of studio apartments ,  among the hottest-selling configurations before the Covid-19 pandemic, has been dipping across the top 7 cities since 2020. A latest  Anarock research shows that out of 1,063 projects launched in H1 2022 across these cities, only 91 projects offered studio apartments – a 9% share. In contrast, of the 1,921 projects launched in 2019, around 368 (19%) had studio apartments.In 2020, the share was 15% – of  the 884 projects launched in the year, about. 130 projects offered studio apartments, while in 2021, 145 out of 1,207 launched projects had studio apartments as options.This y-o-y decline is a significant trend reversal – between 2013 and 2019, the share of new projects offering studio apartments showed a y-o-y increase – from 4% in 2013 to 19% in 2019.

The studio apartment configuration – single rooms serving as bedroom-cum-living room with kitchenette and an attached bathroom, was among the most popular configurations before Covid-19. According to Anuj Puri, Chairman , Anarock Group, they were  seen as ideal starter homes, drawing considerable demand from bachelors, young couples and business travellers visiting the city frequently for work. What they lack in size, they often make up on location – studio apartments are most evident in pricey locations around key employment hubs. The rapid reversal of this trend after Covid-19 is indicative of the major socio-economic changes that have occurred due to the pandemic,

The year 2020, the first and most devastating pandemic year, kickstarted the work-from-home culture – and the ensuing demand for bigger homes. Simultaneously, CBDs and SBDs lost their appeal to the cheaper suburbs and peripheries. In a single year, studio apartments’ presence in new supply sank to 15%, to 12% in 2021, and to 9% in H1 2022.

City-wise Trends

The studio apartments trend is historically the 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 2013-2020, MMR and Pune together accounted for a massive 96% share.In contrast, the southern cities of Bengaluru, Chennai, and Hyderabad never really caught the studio apartment wave – just 34 projects in these three cities had this compact configuration in the same period.In H1 2022, of 91 projects offering studio apartments across the top 7 cities, MMR is at the top with 71 projects, followed by Pune with 18 projects. In Bengaluru, just 2 projects offer this configuration while the other cities do not offer it at all.

Rise and Fall of Studio Apartments

Source: ANAROCK Research

In 2013, of 2,102 projects launched in the top 7 cities, 75 projects offered studio apartments – a 4% share In 2014, the overall share increased to 5% – of 2,812 projects launched, approx. 151 offered studio apartments’ In 2015 , the top 7 cities saw approx. 2,635 projects launched, of which 190 (roughly 7%) included studio apartments.In 2016, approx. 1,911 projects were launched in top cities, of which 128 (7%) incorporated studio apartments.In 2017, 1,826 projects were launched across the top cities, and 197 (11%) had studio apartments. In 2018, the total share increased to 18% – of 2,477 projects launched, approx. 446 had studio apartments. In terms of the number of projects launched in a year, 2018 had the highest saturation of studio apartments. The year 2019 saw approx. 1,921 projects launched, of which 368 (19%) offered studio apartments.From 2020, the trend reversal began – of 884 projects launched, 130 offered this configuration – a 15% share.In 2021, the share declined further to 12% – of 1,207 projects launched, just 145 offered studio apartments.In H1 2022, their share dipped to 9% – of 1,063 projects launched, approx. 91 offered studio apartments.