India’s Urban Homebuyers Weigh Spacious 3 BHKs Against Compact Investments

The Evolving Story of India’s Urban Homes

The Indian real estate market is witnessing a fascinating transformation, as revealed by a recent Magicbricks Research report. While the demand for spacious three-bedroom apartments remains dominant, a quiet revolution is underway—compact homes are emerging as a disruptor, delivering unprecedented price growth and new investment opportunities.

3 BHKs: The Gold Standard for Urban Families

Across 13 major metros, nearly 50% of homebuyers in the first quarter of 2025 have chosen 3 BHK apartments as their preferred option. Cities like Hyderabad (68%), Gurugram (61%), and Noida (60%) lead the trend, reflecting a strong cultural preference for family-friendly, future-proof living spaces. For many, a 3 BHK is more than a home—it’s an investment in comfort, privacy, and long-term value, especially in high-growth urban centres.

The Rise of Compact Homes

Yet, a new trend is quietly gaining ground. Despite making up just 6% of total demand, 1 BHK units have become the surprise stars of the market, with a remarkable 34.4% year-on-year price growth. Demand is especially strong in Gurugram (86.1%) and Greater Noida (70.7%), while Bengaluru and Hyderabad have also seen significant price jumps. Compact homes—often under 500 square feet—are increasingly seen as safe, affordable investments, offering flexibility in uncertain economic times. A survey of nearly 2,000 high-intent homebuyers underscores this growing sentiment for smaller, efficient living spaces.

2 BHKs and the Investor’s Eye

Not to be outdone, 2 BHK homes have also shown robust appreciation, with Greater Noida seeing a 75% YoY price surge and Gurugram following at 58.5%. These numbers highlight the strong investor interest in compact homes, driven by their accessibility and high returns.

A Tale of Two Indias

The demand for homes paints a picture of two Indias. In metros like Mumbai, Thane, and Navi Mumbai, space constraints and affordability drive a preference for 1 and 2 BHK homes. Meanwhile, cities such as New Delhi and Hyderabad showcase a penchant for larger homes, thanks to their more expansive layouts and aspirational buyers. Average residential rates reflect this diversity, ranging from ₹30,256 per sq. ft. in Mumbai to a more accessible ₹8,770 in Hyderabad.

Opportunities for Every Buyer

For both investors and homebuyers, the dual narrative of spacious 3 BHKs and high-yield compact homes offers a spectrum of choices. Whether you seek the comfort of a family home or the promise of lucrative returns, India’s real estate market in 2025 ensures there’s something for everyone.