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Amid 7% Increase in Average Home Sizes in 5 Years, New Flats in MMR Shrunk 20%

  • Average flat sizes in top 7 cities increased from approximately 1,150 sft in 2018 to 1,225 sft in Q1 2023
  • MMR only city where average flat sizes declined – from approximately 932 sft in 2018 to 743 sft in Q1 2023
  • NCR saw the maximum growth in average flat sizes among top 7 cities – from approximately 1,250 sft in 2018 to 1,700 sft in Q1 2023
  • Among top 7 cities, average flat size in Hyderabad is highest at 2,200 sft, followed by NCR; MMR has lowest
  • Yearly trends of average flat sizes in top 7 cities show Q1 2023 saw a 5% annual rise – from approximately 1,170 sft in Q1 2022 to 1,225 sft in Q1 2023

Size continues to matter for Indian homebuyers, even after relative market normalcy has been restored post the Covid-19 pandemic. Latest ANAROCK data indicates that average home sizes in fresh supply hitting the top 7 cities grew 7 per cent in the last five years – from about 1,150 sft in 2018 to 1,225 sft in Q1 2023. In 2022, the average flat size in these cities stood at 1,185 sft, and at 1,170 sft in 2021.

MMR is the only city where average flat sizes reduced in the last five years – from 932 sft in 2018 to 743 sft in Q1 2023. In these five years, only 2020 saw average flat sizes in MMR see an annual rise of 21 per cent against 2019. Since 2020, homes in the region are shrinking.

Among the top 7 cities, NCR saw the highest growth in average flat size in the last five years – from approximately 1,250 sft in 2018 to 1,700 sft in Q1 2023. Developers in NCR are closely tracking demand and launching bigger homes in this region.

•  Hyderabad has the highest average flat size at about 2,200 sft in Q1 2023, followed by NCR with 1,700 sft.

•  In Chennai and Bengaluru, the average flat sizes stand at 1,175 and 1,300 sft, respectively.

•  In Kolkata, average flat size was around 1,150 sft.

•  In Pune, average flat size clocks in at 1,013 sft.

Before Covid-19, apartment sizes were shrinking annually to meet the demand for compact homes prevalent then. The central concerns were affordability and millennials’ preference for low-maintenance homes. 2020 saw an abrupt reversal of buyer preferences. With a sudden emphasis on the WFH and study-from-home culture, flat sizes began increasing for the first time in four years.

In 2023, property prices are heading north but the demand for bigger homes continues. Q1 2023 saw average apartment sizes in the top seven cities increase by approximately 7 per cent since 2018, with MMR the only outlier with average home sizes reducing around 20 per cent in the period.

Average Home Sizes
Source: ANAROCK Research

City Level Yearly Trends

The yearly trends of average flat sizes in the top 7 cities show that Q1 2023 has seen a 5 per cent annual rise – from approximately 1,170 sft in Q1 2022 to 1,225 sft in Q1 2023.

  • NCR saw average flat size rise 50% – from approximately 1,130 sft in Q1 2022 to 1,700 sft in Q1 2023.
  • Kolkata saw flat sizes increase by 44% – from a modest 800 sft in Q1 2022 to 1,150 sft in Q1 2023.
  • Hyderabad saw average flat size increase by 29% in the year – from 1,700 sft in Q1 2022 to 2,200 sft in Q1 2023.
  • Pune saw a 16% yearly increase – from 877 sft back in Q1 2022 to 1,013 sft in Q1 2023.
  • Bengaluru saw an 8% yearly jump in average flat sizes – from 1,200 sft in Q1 2022 to 1,300 sft in Q1 2023.
  • Chennai saw flat sizes decrease by 6% – from approximately 1,250 sft in Q1 2022 to 1,175 sft in Q1 2023
  • MMR saw average flat sizes decrease by 5% –  from 783 sft in Q1 2022 to 743 sft in Q1 2023.

The notable exceptions of MMR and Chennai are certainly interesting. A perception among developers that there is currently a sufficient existing supply of larger format homes may be a factor. Also, while MMR is hyper-expensive, Chennai is a very cost-sensitive market. In both instances, increasing the supply of smaller, more affordable homes makes sense.

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