With the Indian Real Estate industry still facing a slowdown and stagnant property prices, the average size of apartments has been curtailed by the developers in Kolkata for the previous 5 years to maintain a balance between the buyer’s choice and affordability.
Slowly following the Mumbai Metropolitan Region amid the prime cities of the country, Kolkata has done away with expansive apartments as is seen in a study by a renowned property consultant. 2018 experienced a slump in the size of homes on average 950 square feet from 1,230 square feet in 2014 by 23 %. Although the study covers organised players in the Real Estate industry there is evidence that shows local builders are also imitating the trend.
According to the developers, the buyers’ aspirations have to be met without ignoring their trouble of paying heavy EMIs. Thus, a fine balance between the price and the buyer’s needs have to be maintained for picking up sales in such circumstances.
Apartments with a carpet area of 2,500 square feet in the most eminent residential projects in Kolkata will fetch a cost of 3.5 crore rupees onwards while 10 crores are the starting price for luxury units spread over 7,500 square feet and above. These have been the benchmarks since 2011 in Kolkata that might have suited Mumbai but not the city’s micro market, which demands response.
There are developers who could sell more than 1,000 flats sized at 500 square feet at Serampore in the affordable housing category and that also without waiting for even a year. As told by them, they design projects in a manner such that not a single flat has a dead space and are affordable, as well.
As revealed by the study, the size of the units in the affordable housing segment has been awfully reduced by 23% but the developers have concentrated in compact designs where each square foot have been properly used to make the most of it.
Tricks have been applied to these projects in the affordable housing segment, as stated by a developer who has saved on the space required for staircase and lobby by keeping the height less than 40 metres and offering hanging wardrobe that does not come within the allowable built-up area.
The flats priced between 40 and 80 lakh rupees have experienced the minimum reduction in size whereas the sizes of the luxury apartments have been curtailed by nearly 20%. Larger properties demand higher maintenance charges that discourage most of the millennial home buyers from investing in such properties. This is also a factor responsible for the Indian homes to get smaller.
The last few years have experienced shrinkage in the size of apartments across the country. As per the aforementioned study, the 7 major Indian cities have witnessed an average trimming of 17 % during the period from 2014 to 2018. MMR (Mumbai Metropolitan Region) ranks first among these cities where the size of apartments have minimized considerably to 700 square feet in 2018 from 960 square feet in 2014.
With the increasing demand for budget-friendly housing, the apartment sizes are shrinking. High property price is another factor that has prompted the developers to match the type of home with the home buyer’s demand.
Over the last 5 years, the property size has decreased by about 12 % on an average in Bengaluru. At present, the apartments in the city measure 1,260 square feet area. Hyderabad boasts of offering properties with the highest average size nearly 1,600 square feet. Large-sized homes have always been a preference of the traditional residence in Hyderabad. Delhi NCR, Pune, Hyderabad and Chennai have witnessed the trimming of the apartment sizes on an average by 16%, 22%, 13% and 15%, respectively.
Good location and affordability have outdone large homes in locations distant to the heart of the city, for the millennial home buyers. Thereafter, the developers are compromising on the size of apartments to maintain the other two conditions related to budget and location. Pocket-friendly housing projects might attract a larger customer base as expected by the developers.
Most of the millennial buyers dislike investing in high maintenance charges demanded by larger homes. Besides, they are more flexible than their previous generations and prefer changing locations as and when required for career growth. They also do not have any hurry for settling down or start families. The average age of marriage in India has changed to 30-35 yrs from 21-25 yrs. So, big homes aren’t a necessity for them. The income and job market isn’t quite viable, which influences the affordability of the buyers, as well.
The previous experiences of purchasing luxury and ultra-rich properties have been bitter for most NRIs (Non-Resident Indian), which has been keeping them off from such properties for some time now. On the other hand, 95 % of the NRIs accounts for wage earners who find it hard to afford luxury projects.
The NRIs are preferring to invest in small-ticket sizes over luxury properties since the former provides them comparatively better rental returns on investment and the options to exit are also easier.
Residential projects within the price range of 60 lakh rupees and 2 crores have become the choice of investment for NRIs. Many of the ticket-sizes within this price category are affordable housing projects that are being sought after by the Non-Resident Indians. The idea is to earn returns from multiple budget investments through selling or renting than splash out on a single big development.
Even the cost of foreign currencies are much lower than the Indian rupee, the high cost of living compared to the low salary hardly allows an NRI to save sufficient disposable income. Thus, if he invests in a highly luxurious project, he won’t have money enough to start a business for a livelihood when he returns here.
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