To accommodate a huge population of India, the real estate developers continuously deliver housing projects across many parts of the country. The ever-changing dynamics of residential real estate is simply the reflection of what aspiring Indians seek in their property today. With their innovation and cutting edge technology, developers are coming up with the best of luxury residential spaces, along with amenities beyond one's imagination. Besides their effort, the government's progressive housing schemes empower them to tap in the areas which were hard to cash in a decade earlier. The current phase is open to various options, benefitting both builders and buyers.
Sizes of the flats have reduced in various Indian cities
One of the latest trends in housing segment in the Indian real estate shows a decline of 27% in sizes of residential developments over the last five years. The decline in size has been reportedly carried out on seven major cities in the country, namely Pune, Mumbai Metropolitan Region (MMR), Delhi/National Capital Region (NCR), Chennai, Kolkata, Bengaluru, and Hyderabad. Earlier in 2014, the size of a flat used to be 1,400 sq ft. The same flat at present has narrowed to 1,020 sq ft.
Following are the city-wise statistics:
Mumbai Metropolitan Region sees a reduction of 45% in flat sizes, which means a flat sized 960 sq ft in 2014 is now 530 sq ft on an average.
In the last five years, Pune flats see a decline of 38% in their sizes. 600 sq ft is the current average sized flat available in the region.
In Hyderabad, the reduction in size is 12% with flats available at 1,570 sq ft.
The city of Kolkata has witnessed a reduction of 9% in flat sizes and currently stands at 1,120 sq ft.
Flats in Chennai have reduced by 8% with size available at 1,190 sq ft.
Bangalore flat size at present is on an average of 1,300 sq ft with 9% reduction in size.
However, good news for homebuyers seeking to invest in the National Capital Region is the reduction rate being slightly lower with 6% in flat sizes.
What is causing developers to reduce the flat sizes?
The liquidity crunch, changing buyer preferences with they being more aware of the market and options, and high preference on affordable homes are some of the factors causing developers to shrink the flat sizes in the afore-mentioned cities.
Hence, the popular belief of "Bada Hai Toh Behtar Hai" seems to have frozen in the real estate sector as of now.
Another dominating factor is the initiative of Pradhan Mantri Awas Yojana (PMAY) by the Government of India, launched in 2015. The vision is to provide a total of 20 million affordable houses by the year 2022 in cities as well as rural regions. All seven cities are included in the Yojna as well. Buying a home in a metro city has been now made possible for all by the government. Hence, a huge population of the middle class in these cities are increasingly availing the benefits of PMAY.
The same initiative has enabled the developers to grow their customer base and sell more and more living spaces. According to the Yojna, a home should be constructed and priced below ₹ 45 lacs. By now, almost all the big players have become a part of this government plan by proving affordable homes. However, the strategy they have opted is to price the property as per the norms, but reduce the size — the result of which buyers are losing out on space.
The factor that makes affordable housing segment tempting is the 1% GST applicable in affordable properties, while other under-construction properties come with 5% GST charge. Hence, flat size to the buyers have become less important compared to such benefits.