Size of apartments go down, so do prices

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."