The trend of Boutique homes for Millennial who are the new-age home buyers.

With the geographical boundaries of cities expanding and their population growing, compact homes are once again in demand are gaining popularity owing to the rapid rise of population and space crunch in Mumbai City. With rising rents and housing becoming expensive over the years, home buyers are opting for homes that are smaller in size but well within their budget. A compact home is a home that is small in size, cost-effective and easy to maintain.

The Millennial homeowner is not some one-in-a-billion, mythical unicorn. Under the right social and economic conditions, today’s twenty- and thirty-something’s are buying, particularly as they get married and start families. Compact home would be a sound place to park some money and hopefully earn a modest return.

For young home buyers, small is turning out to be beautiful in these locations that are usually associated with large size premium offerings by big developers. Home buyers’ preference is changing with time. Several urban buyers are increasingly looking for new homes near their office locations which could be small in size. They prefer a house that is “sufficient” enough for the nuclear family’s requirements. This does not mean that they are compromising on their lifestyle, they prefer a small compact home equipped with all basic amenities.

“These boutique- compact apartments’ act as a solution for the working populace helping them to buy their dream home at a relatively affordable price in a well-established and connected location with basic socio-civic amenities and also offers a close proximity to their workplace. Such apartments are price friendly and also augur well for the developers to keep the business rolling. More than one-third or about 36 per cent of home buyers today are under 35 years of age as easy financing options and availability of smaller units is allowing the millennial to own a house much earlier than the conventional age of over 40.

In the housing market, the influence of the millennial, aged between 25 and 35, is growing and is closely behind the 35-45 age group, which comprises slightly over 40 per cent of the buyer base.

Even though compact homes are similar to affordable housing projects in term of configuration, they differ in terms of amenities such as clubhouses, gyms and so on, and even construction qualities. Prices in such projects vary between 25 lakh and 99 lakh with an area starting from 300 sq feet to 650 sq feet.

In the age of Millennial, the trend of solo living, nuclear families, rental living and ever migrating working couples has redefined the product trend in Indian real estate recently. With rapid urbanization and growing job prospects there is a huge influx of working populace shifting to urban areas which is already space starved and congested.

The youth are getting a buying boost because of the spurt in smaller units like one-BHKs, studio apartments and micro-homes, which are generally priced in the 30/40-lakh range. “This bracket is the sweet spot of majority of young buyers. With low prices, these units offer lower barrier to investment.

By 2020, 65 per cent of our population will be under the age of 35, it is critical that we gain insights into the behavior of this population class. For instance, 82 per cent of the millennial stay with their parents, saving for the future is among their top priorities and a large majority look at real estate as a sound investment opportunity.

Moreover, these compact units can be put up on rent easily in case the owner decides to move city. “Small units offer better rental yields compared to bigger apartments. While a one-BHK in Mumbai will give a yield of 3.20 per cent, it is 2.10 per cent for a three- BHK.

Being compact, such units are increasingly becoming part of larger retail and office space development to promote walk-to-work culture. This adds to their popularity among young buyers.