Real estate moving towards smaller homes across India: Report
The liquidity crisis in the real estate industry, strict sanctioning of loans by banks and customers’ preference for affordable homes have resulted in developers offering smaller homes in major cities across India. A study released by realty consultant Anarock on Monday said that average apartment sizes have shrunk by 27% over the past five years — from 1,400 square feet in 2014 to nearly 1,020 sq ft in 2019 so far.
However, what is surprising is that minimum decline (6%) in size of houses has been seen in the national capital region (NCR), which is one of the worst-hit realty markets in the country, the report said.
According to the Anarock report, while average size of apartments offered for sale across the country came down to 1,020 sq ft, in the NCR the size was 1,390 sq ft.
Experts said that the reason for reducing sizes of apartment was rising demand for affordable houses among buyers. Anuj Puri, chairman, Anarock Property Consultants, said that buyers increasingly wanted to take benefit of credit subsidy given to affordable housing, which is required to be priced less than Rs 45 lakh and the area should not exceed 60 square metre. “There is also GST benefit for affordable housing as it is fixed at 1% against 5% for mid-segment homes,” said Puri.
Sanjay Sharma, a Gurugram-based realty consultant, said that the reason sizes have not come down in Delhi-NCR market is that a number of projects had already been launched in 1,500-1,800 sq ft for 2BHKs prior to 2014. “There is also a preference in Gurugram for larger apartments with more facilities and better common areas. Newer projects being launched now might be smaller as per the market demand,” Sharma said.
The Anarock study says that the NCR saw least decline at 6%, while houses in Chennai went smaller by 8%, and in Bengaluru and Kolkata by 9%. Mumbai Metropolitan Region (MMR) and Pune saw highest reduction in size by 45% and 38%, respectively, the report said.