As the apartments elsewhere in country are getting smaller, they are also becoming more affordable. But in Pune, while the size of an apartment has reduced marginally, the prices have gone up, global real-estate consultant Cushman & Wakefield said in a statement released on Thursday.
The firm pointed that 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. In Pune, however, the size of an apartment reduced by only 6 percent but the costs still went up by about 4 percent. In Mumbai, the size reduced drastically, by about 12 percent while the cost too went down by about 9 percent.Other markets that saw unit sizes drop were Ahmedabad (8%), Chennai (3%), Hyderabad (9%), Pune (6%), and Gurgaon (3%).
"The prices of land, material of construction and labor is increased in the city which has resulted in the price hike per sq ft. To keep the overall cost of flats same as before, we have reduced area of the flat. A typical 650 sq ft area 1 BHK flat is now reduced to 500 sq ft and a 900 sq ft 2-BHK flat is reduced to 750 sq ft," said Shankar Sheth Jagtap, of the Chandrarang Developers.
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."