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Tuesday, March 12, 2019

Chennai flat sizes shrink by 15% in FIVE Years..!


Chennai flat sizes shrink by 15% in FIVE Years..!

"Honey, I Shrunk the Flat!" - Budget Housing Sizes See Most Decline in 5 Years

 By Mr.  Anuj Puri, Chairman – ANAROCK Property Consultants

  • Properties within Rs. 40 lakh budget see 23% fall in average sizes – from 750 square feet in 2014 to 580 square feet in 2018.                                                                                                              
  • Average property sizes in top 7 cities decline by 17% in 5 years; from 1,390 square feet in 2014 to 1,100 square feet in 2018.                                                                                                                     
  • Bangalore sees least size reduction at 12%, MMR tops with 27% average decrease

When it comes to housing, size matters for all kinds of reasons. 

The added floor space of larger homes definitely spells comfort, convenience and family scalability, every additional square foot either comes at a higher price or pushes available options further away from the central regions of a city.

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.

As a result, the top 7 Indian cities collectively saw average apartment sizes shrink by nearly 17% between 2014 and 2018. However, this has not been a uniform phenomenon.

  • Among the top cities, MMR topped the list with a 27% average decrease in apartment sizes – from 960 square feet in 2014 to 700 square feet in 2018.                                                     
  • Bangalore saw least decline in average property size at around 12% in five years. The current average apartment size in Bangalore is 1,260 square feet Interestingly, prior to 2017, the average sizes in Bangalore fluctuated by merely 1-2% y-o-y; in 2018, they dropped by over 12% against the preceding year.                                                                                         
  • Hyderabad currently has the highest average property sizes about 1,600 square feet Property buyers in Hyderabad have traditionally preferred large-sized homes, which dovetails favourably with the fact that property prices here have been more realistic than in most other cities.

Pan-India Average Apartment Sizes: 2014 vs 2018

Cities
Average Sizes (2014)
Average Sizes (2018)
% Change
NCR
1,485
1,250
-16%
MMR
960
700
-27%
Bangalore
1,430
1,260
-12%
Hyderabad
1,830
1,600
-13%
Chennai
1,290
1,100
-15%
Pune
960
750
-22%
Kolkata
1,230
950
-23%
Pan-India
1,390
1,160
-17%
Source: ANAROCK Research

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.

The Millennial Connection

Another reason for shrinking apartment sizes is that most millennial homebuyers are averse to investing in both the higher maintenance costs and extra efforts that larger properties entail. 

However, this is not their only reason - Millennials actually prefer to own smaller homes.

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.

Live-in relationships are becoming more popular and socially acceptable, and more and more young people give high priority to career growth before deciding to marry and ‘settle down’. The average age of marriage in India has increased from age 21-25 in previous years to age 30-35 in recent years.

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

Segment-wise apartment reduction
  • The maximum reduction in average property sizes was seen in the budget housing segment priced < Rs. 40 lakhs. The average size of homes priced below Rs. 40 lakh was 750 square feet in 2014, and it reduced by 23% in 2018.                       
  • Interestingly, apartment sizes in the luxury housing segment (priced above Rs. 80 lakh) also saw a 20% reduction over the last 5 years. The average size of properties in this segment was 1,830 square feet in 2014, which came down to 1,460 square feet in 2018.                                                                     
  • Mid-segment housing priced between Rs. 40 - Rs.80 lakhs saw the least size reduction of 17% - from 1,150 square feet in 2014 to around 950 square feet in 2018. 
The reduction in flat size has invariably been achieved by the elimination of extra balconies - and in many cases all balconies - and better apartment designs that allow more efficient use of smaller spaces.

For media contact 
Head – Media Relations 
ANAROCK Property Consultants Pvt. Ltd.
Office No. - 901 A, 9th Floor, Onyx, next to Westin Hotel, Koregaon Park,
Pune, Maharashtra - 411001
+91 9657129999


Chennai flat sizes shrink by 15% in FIVE Years..! Reviewed by S Chitra on March 12, 2019 Rating: 5 Chennai flat sizes shrink by 15% in FIVE Years..! "Honey, I Shrunk the Flat...

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