Why 1 BHK Homes are Becoming a Hit Among Millennials in Bengaluru
High rental yields and rising affordability levels are driving demand for 1 BHK housing units among millennials in Bengaluru
Bengaluru1 Bhk HomesMillennialsReal EstateInvestmentReal Estate NewsAug 03, 2024
Demand for 1 BHK residential units in Bengaluru has seen a steady rise following the Covid-19 pandemic, developers and local brokers have noted. Brigade Group COO, residential, Viswa Prathap Desu cited a roughly 30% increase in demand for 1 BHK apartments in Bengaluru in the last three years.
Homebuyers and industry players credited several factors - including high rental yields, rising affordability levels and alternative business models, among others - for this rise in demand. “I would much rather convert my monthly rent into EMI and add a little to my security deposit to use as downpayment for a property of my own,” said Priyakshi Sharma, a 29-year-old software engineer.
Furthermore, those eyeing a property purchase from an investment perspective, are convinced by the high rental yields in the city. With property prices surging by 10-12% year-on-year in Bengaluru, many investors are opting for a 1 BHK as opposed to the traditional choice of a 2 BHK, several builders said.
According to proptech unicorn NoBroker, the average rental yield in Bengaluru ranges anywhere between 4-5%, against 3% in Mumbai and 2.5% in Delhi-NCR. This has made 1 BHK homes an attractive investment option for many.
Developers are also planning to give more attention to the 1 BHK segment, going forward. Concorde, which usually reserves a 3% share for 1 BHK units in the brand's projects, has allocated 5-6% to units in this configuration in two upcoming projects.
In terms of demographics, 1 BHK homebuyers in Bengaluru are largely early career professionals between 27-35 age bracket, working in the private sector, largely as techies and doctors. Meanwhile, 60% of the 1 BHK buyers in the city aim to generate steady rental income or benefit from value appreciation of the property over time.
These investors largely come from the 35-50 age bracket, with a varied mix of professional backgrounds.
Frequently Asked Questions
Why are 1 BHK homes becoming popular in Bengaluru?
High rental yields, rising affordability levels and alternative business models are driving demand for 1 BHK housing units among millennials in Bengaluru.
Who are the typical buyers of 1 BHK homes in Bengaluru?
1 BHK homebuyers in Bengaluru are largely early career professionals between 27-35 age bracket, working in the private sector, largely as techies and doctors.
What is the average rental yield in Bengaluru?
According to proptech unicorn NoBroker, the average rental yield in Bengaluru ranges anywhere between 4-5%.
Why are developers giving more attention to the 1 BHK segment?
Developers are planning to give more attention to the 1 BHK segment due to the rising demand and attractive investment options it offers.
What is the age bracket of investors buying 1 BHK homes in Bengaluru?
Investors buying 1 BHK homes in Bengaluru largely come from the 35-50 age bracket, with a varied mix of professional backgrounds.
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