Developers attract more buyers but could be forced to shed their cherished 'luxury' market categorization.
Average flat sizes across the country have shrunk by 27% since 2014, and those in the Mumbai Metropolitan Region (MMR) have gotten tinier. The city that never sleeps recorded the highest drop of 45% – from 960 sqft in 2014 to 530 sqft in 2019. Which means if a Mumbaikar does want to catch a wink, (s)he may have to squeeze into a bedroom, if (s)he has a dedicated one.
The report by Anarock Property Consultants suggests that liquidity crisis, changing buyer preferences and growing concerns about affordability have been the catalysts for real estate developers to alter the conventional wisdom of 'bigger the better' to 'good things come in small packages' and significantly moderate unit sizes across seven major cities.
"MMR already has the least average apartment size among all top cities," said Anuj Puri, Chairman, Anarock Property Consultants. "After Mumbai, Pune followed second with a 38% reduction, with the average apartment size currently at 600 sqft."
Among the major factors contributing to the escalating claustrophobia, demand for affordable homes in metros tops the list. "Buyers are increasingly looking at availing the government's credit subsidy benefits for affordable housing," says the report.
"These require a home to be priced under Rs 45 lakh and not exceed 60 sqmt carpet area limit or approximately 850 sqft built-up area (including overall loading)."
In this light, the reduction in sizes – particularly in the affordable segment — helps buyers avail the subsidies.
Moreover, buying an affordable home also comes with GST benefits. The GST for affordable housing is 1% as against 5% for mid-segment homes."
In short, buyers get reduced costs and added benefits but lose out on space. Developers attract more buyers but could be forced to shed their cherished 'luxury' market categorization.
Apartment sizes have shrunk even in the affordable segment. MMR, with a current average size of 425 sqft, saw a 33% reduction since 2014, as per the report.
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