Demand for two and three bedroom apartments, which reigned high across India during pre-meltdown times, has once gain made a comeback after a prolonged period of lull.

According to a report published by Jones Lang LaSalle Meghraj (JLLM), a global real estate consultancy, the residential realty market in India has once again picked up pace over the last two to three quarters, with the return of the aspirational buyers willing to check out lucrative deals.

More report details

The realty sector in India was severely affected by the economic meltdown. In an endeavour to fight the economic recession, realtors in India adopted various strategies. A prominent strategy noted among most realty developers of the country is the shift towards the construction of one-bedroom and studio units in the ‘affordable’ housing category from two to three bedroom apartments, says the report.

“Renewed buyer interest for two and three bedroom apartments has once again encouraged Indian realty developers to rethink on the lines of constructing large-sized apartments,” says Sushil Kumar Mathur, Managing Partner of Sunehri Bagh Builders Pvt Ltd, a mid-sized property developer in New Delhi.

Furthermore, with the return of the general buyer preference for two and three bedroom apartments, projects that were put on indefinite hold during the financial crunch are now witnessing the light of day. The most popular price tag for these large-sized apartments, at present, ranges between Rs 25 and Rs 35 lakh.

In addition to this, the report said that with the pent-up demand for big homes, developers across major cities in India are spending lavishly on advertisements for projects that will be launched within the next 6 months. Besides, developers are offering price discounts on projects to be launched during the festive season. These initiatives undertaken by the Indian realty developers will definitely give the segment a boost and will attract more and more buyers.

Demand drivers

Several factors have contributed to this rise in demand for two and three bedroom apartments. Positive consumer sentiments and softening of home loan interest rates to 8-8.5% by both nationalised as well as private Indian banks on fixed interest loans for 3 years, as against 10-11% that prevailed a few months back are the two primary factors that are driving the demand for big homes.

However, the Confederation of Real Estate Associations of India (CREDAI) feels that the increased feeling of job stability and the realisation that the residential realty prices have finally bottomed out are prompting buyers to look out for attractive deals in preferred areas.  

“Although the surge in demand for big homes has uplifted the mood of the realtors after some difficult quarters, most realtors are keeping their fingers crossed. This is because with buyers becoming more and more price-sensitive, demand for big apartments will only continue to increase as long as rates remain rational,” says Mujahid Ahmed, Proprietor of Zain Real Esate and Developers, a mid-sized realty firm in Bengaluru.

Going forward, government impetus and increasing number of projects in this category will lead to price stabilisation, which will eventually trigger the sales of large sized apartments in India over the coming years.

Jeeta Bandopadhyay