The top 7 cities collectively saw the average apartment sizes shrink by nearly 17% between 2014 and 2018, as per a data by property consultant Anarock
Millennials attribute high value on location flexibility and don’t get tied to neighbourhood the way the previous generations did
Mumbai: Do you like big houses or prefer a smaller one? Whether you like it or not, builders are opting for smaller apartments, considering the rise in demand for affordable houses at good location. The top seven cities collectively saw the average apartment sizes shrink by nearly 17% between 2014 and 2018, as per a data by property consultant Anarock.
A major factor contributing to the shrinking apartment sizes across most metros is the rising demand for budget-friendly housing. “With property prices going overboard in most metros, developers have been reducing sizes to align their offerings more with the actual homebuyer demand. Another reason for shrinking apartment sizes is that most millennial homebuyers are averse to investing in the higher maintenance costs and extra efforts that larger properties entail. Millennials attribute high value on location flexibility and don’t get tied to neighbourhood the way the previous generations did," notes Anarock. Compact housing is the fastest seller in the resale market, so such homes give millennials locational and financial flexibility, while simultaneously allowing them the security and investment advantages of homeownership.
According to Anarock , the maximum reduction in average property sizes was seen in the budget housing segment priced ₹40 lakh. The average size of homes priced below ₹40 lakh was 750 sq. ft in 2014, and it reduced by 23% in 2018. Apartment sizes in the luxury housing segment (priced above ₹80 lakh) also saw a 20% reduction over the last five years. The average size of properties in this segment was 1,830 sq. ft in 2014, which came down to 1,460 sq. ft in 2018. Mid-segment housing priced from ₹40 lakh to 80 lakh saw the least size reduction of 17%, from 1,150 sq. ft in 2014 to around 950 sq. ft in 2018. Tax incentive has also played a role in reduction of apartment size. “The government’s tax incentive for the builders to build smaller size apartment has driven the market. Secondly, bigger size apartments are outside consumers’ budget. Builders, instead of reducing prices, rationalise it by reducing the size of the apartments. There is a perspective of meeting the affordability," said Pankaj Kapoor, managing director, Liases Foras.
Do the consumers want smaller houses? Experts say beyond a threshold the idea will not work. “There are certain experiments done where you get 180 sq. ft, but I doubt if it will work. There are talks of one bedroom kitchen (1BHK) coming back. But does it fulfil family needs? As a newly married or unmarried, you may buy it, but there is a need for more than 1BHK as you move to the next stages of your life. In India, it is not about preference but frustrated preference," said Pankaj. If you are looking to buy a property, do not opt for a flat just based on cost. It would be prudent to buy real estate for use based on requirement in the long run. Hence, understand whether the size of the apartment is sufficient for you not just from the monetary point but also based on your lifestyle needs.