Anuj Puri
The liquidity crisis, changing buyer preferences, and growing concerns about affordability. These market realities have caused real estate developers to rethink the conventional wisdom of ‘bigger is better’, and to significantly moderate unit sizes across the 7 major cities.
ANAROCK’s most recent data indicates that average apartment sizes in the top 7 cities have shrunk by 27% over the last five years – from 1,400 sft. in 2014 to nearly 1,020 sft. in 2019 so far. Surprisingly, NCR – one of the worst-hit residential markets in recent years – has seen the least decline of merely 6% during this period. The current average size of apartments in NCR is nearly 1,390 sft., pulling ahead of Bangalore where average flat sizes reduced to 1,300 sft. in 2019.
Highlights:
- Avg. property sizes decline from 1,400 sft. in 2014 to 1,020 sft. in 2019
- NCR sees the least decline of 6%, followed by Chennai with 8% and Bengaluru & Kolkata with 9% each
MMR & Pune see the highest decline of 45% and 38% respectively - Avg. property sizes currently highest in Hyderabad at 1,570 sq. ft.; MMR has least with 530 sft. area
- Affordable homes priced
MMR already has the least average apartment size among all top cities, and also recorded the highest drop of 45% – from 960 sft. in 2014 to 530 sft. in 2019. Pune followed with a 38% reduction in sizes during this period, with the average apartment size currently at 600 sft.
(Average sizes in both MMR and Pune are calculated on the carpet area while for the remaining cities it is based on the built-up area.)
“Interestingly, the main southern cities of Chennai, Bangalore and Hyderabad have seen size reduction of 8%, 9% and 12% respectively over the last five years,” says Puri. “What also makes these cities unique is that the prevailing average sizes of apartments are among the highest.”
For instance, the current average size of properties in Hyderabad (at 1,570 sft.) is the maximum among the top 7 cities. Similarly, the average size of properties in Bangalore is also comparatively bigger at about 1,300 sft. while in Chennai it is approx. 1,190 sft.
Meanwhile, Kolkata saw sizes reduce by 9% over the last five years to stand at 1,120 sft. now against 1,230 sft. in 2014.
Why Flat Sizes are Shrinking
Among the major factors contributing to the escalating ‘claustrophobia effect’ of shrinking apartment sizes, demand for affordable homes in metros tops the list. Also, buyers are increasingly looking to avail the government’s credit subsidy benefits for affordable housing. These require a home to be priced
Also Read: Age of Indian Homebuyers – Across Decades and Cities
Segment-wise Break-up
On further analysis, it emerges that affordable homes priced Affordable Housing: City-wise Dynamics Bangalore has seen a maximum reduction in average affordable property sizes. In 2014, the average size of an affordable unit was around 1,070 sft. area – this fell sharply to around 710 sft. in 2019. Though the ‘Garden City’ has a high demand for mid-segment properties, affordable homes are also attracting contemporary homebuyers. Pune, India’s other IT hub, has seen the least reduction in sizes of affordable units (20%) in the last five years. This coincides with the fact that within the city, affordable homes have maximum demand and builders are wary of tampering with sizes. Of the total 22,830 units sold in Pune in H1 2019, nearly 47% belonged to the affordable category alone. The current average size of units in affordable homes is around 565 sft. – slightly more than the national average of 540 sft. MMR, with a current average size of 425 sft., saw a 33% reduction in affordable housing sizes since 2014, followed by Chennai with 30% during this period. Sizes reduced from 900 sft. in 2014 to 630 sft. in 2019. Hyderabad has the maximum average size in the affordable category among the top 7 cities with 810 sft. Average unit sizes have reduced by 26% since 2014, followed by Kolkata with 24% at 705 sft. currently. NCR saw affordable housing sizes reduce to 650 sft. from 890 sft. in 2014. The author is chairman of ANAROCK Property Consultants
