Mumbai: Budget housing on a rise, average flat shrinks 27% in 2018

MUMBAI: Apartment sizes in India have shrunk over the past few years. The top seven Indian cities collectively saw average apartment sizes reduce by nearly 17% between 2014 and 2018, says a report by Anarock Property Consultants.



Mumbai Metropolitan Region topped the list with a 27% average decrease in apartment sizes-from 960 sq ft in 2014 to 700 sq ft in 2018.

According to the report, a major factor contributing to the shrinking sizes is the rising demand for budget-friendly housing. With property prices going overboard, developers have been reducing sizes to align their offerings more with the actual homebuyer demand.

Bangalore saw least decline in average property size at around 12% in five years. The current average apartment size in Bangalore is 1,260 sq ft. Prior to 2017, the average sizes in Bangalore fluctuated by merely 1-2% year on year; in 2018, they dropped by over 12% against the preceding year.

Hyderabad currently has the highest average property sizes about 1,600 sq ft. "Buyers in Hyderabad have traditionally preferred large-sized homes, which dovetails favourably with the fact that prices here have been more realistic than in other cities," said the report.

"Millennial homebuyers have already made it clear that they prefer affordability coupled with good location over larger-sized homes in the far-flung suburbs. Simultaneously, developers are intent on making their housing projects more pocket-friendly for a higher customer base," said Anuj Puri, chairman of Anarock.

He added that another reason for shrinking flat sizes is that most millennial homebuyers are averse to investing in higher maintenance costs and extra efforts that larger properties entail. "But this is not their only reason-they prefer to own smaller homes," said Puri.

Millennials attribute high value on location flexibility and do not get 'tied to' neighbourhoods the way the previous generations did. Frequent 'switching' of cities is rapidly becoming the new normal for millennials on the lookout for faster career growth. Also, they're in no hurry to marry and start families, said the report.

Compact housing is also the fastest seller on the resale market, so such homes gives millennials both locational and financial flexibility while simultaneously allowing them the security and investment advantages of homeownership.

"The preference for smaller homes by India's most solvent age demographic contrasts sharply with the onus on larger flats in previous years. It took developers a while to accept it-one of the main reasons why there is so much unsold mid-range housing inventory today," it said.