Indian Real Estate Focusing More on Smaller Homes

The real estate developers started offering smaller homes in several major cities pan India by considering banks’ strict rules in sanctioning the loans, liquidity crisis in the realty sector, and customers’ focus on affordable homes. A real estate consulting firm, Anarock has released a report that there is a 27% decline in the average apartment sizes over the past five years to 1,020 sq. ft. today from 1400 sq. ft. in 2014.
But one interesting thing is that the minimum decline in the size of houses is 6% which has been recorded in NCR, one of the worst-hit real estate markets in India, according to the report. As reported by Anarock, the average size for apartments available in the NCR recorded was 1,390 sq. ft, while it came down to only 1020 sq. ft. for the rest of India.

According to the experts, the increasing demand for affordable homes among the home buyers was the main reason behind cutting sizes. A large number of buyers want to get the most of credit subsidy offered in affordable housing, which requires property price to be less than Rs. 45 Lakh and the area should be smaller than 60 sq. meters, according to Anuj Puri, Chairman, Anarock Property Consultants. In mid-segment homes, affordable housing also has GST benefits. It is fixed at 1% over 5%. According to a Gurugram-based real estate consultant, Sanjay Sharma, a lot of projects had been launched already offering 2BHK homes with sizes ranging from 1500 sq. ft. to 1800 sq. ft. before 2014 in Delhi and NCR. This is the reason sizes have remained unchanged. He further said, “There is also a great demand for larger apartments with better common spaces and more facilities in Gurugram. However, newer projects might meet market demand by offering smaller homes.” According to a report released by Anarock, there is a decline of 6% in NCR, while Chennai real estate went smaller by 8 percent and in Kolkata and Bangalore by 9%. On the other hand, the highest decline in sizes was recorded in Pune and Mumbai Metropolitan Region (MMR), i.e. 38% and 45% respectively.

Indian Real Estate Focusing More on Smaller Homes