Global real-estate consultant Cushman & Wakefield says apartments in Mumbai and other cities have become more affordable following a reduction in their sizes in 2014 launches.
Mumbai witnessed a 12% reduction in apartment sizes, easing cost by 9% over the last year. Noida recorded the sharpest decline of 16%.
In the over 50,000 mid-segment units (one and two BHKs) of new projects across top eight cities in the first quarter of 2014, most cities have seen a reduction in size of approximately 100 sq ft.
Other markets that saw unit sizes drop were Ahmedabad (8%), Chennai (3%), Hyderabad (9%), Pune (6%), and Gurgaon (3%).
However, there were two exceptions – Kolkata and Bengaluru. In these markets, both unit sizes and per square foot rates saw an increase.
Chennai, Gurgaon and Hyderabad witnessed an additional push towards affordable options as they saw a decline in prices of new launches, though most of these launches have been in the peripheral or futuristic locations with lower benchmark pricing.
"These locations are generally price-sensitive and driven by end-user purchase, making it necessary to meet price expectations," the company said.
Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield said: "The residential sector is banking on end-user driven demand and developers are tweaking products to make them more affordable. It also signals a degree of stress among developers, which is forcing them to launch products to inject doses of robust sales numbers into their balance sheets. Affordability holds the key right now. End-user buyers have been shying away from making purchases for a long time, owing to lacklustre economic conditions and low confidence."
On Kolkata and Bengaluru, the report said: "Apartment costs have increased by 18% in Kolkata and 7% in Bengaluru. This is indicative of a strong end-user-driven market that is catering to the large middle-class population within these cities."
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