On May 18, 2019, Hindustan Times (HT Estates) featured a story on Size of Flats in Pune, mentioning a quote by Mr. Tanuj Shori, the Founder & CEO, Square Yards. Tanuj Shori describes the size of flats in Pune has decreased by 19%
Apartment sizes in Pune have reduced by approximately 19% in recent times. The real estate market is now witnessed renewed growth after a slump that lasted for a few years on account of latent market demand which is being manifested currently and also measures taken by the Government that have boosted the industry considerably. New buyers are now preferring apartments in the affordable and mid-range categories and millennials are also accounting for a major chunk of buyers in these segments.
Several new homebuyers are being attracted to the affordable housing category, thereby driving demand and sales alike while spurring more supply from developers as well. There is vast demand for mid-range and affordable housing in the market and this is now being balanced by increasingly available housing supply. This category is also witnessing more importance in the property portfolios of several Indian developers.
For H1 FY2016-17, this category contributed around 29% of total sales in the residential segment and this increased to 32% in H2. This figure also touched a whopping 42.7% in the first half of the current financial year and this indicated 21% in terms of the compounded annual growth rate (CAGR). For meeting the rising demand from new homebuyers, real estate developers are now coming out with more affordable housing offers and apartment sizes are subsequently being lowered. As per recent reports from SquareYards, apartment sizes have come down across India’s top metros including Mumbai, Delhi, Bangalore, Gurgaon, Noida, Chennai, Pune and Kolkata.
Average apartment sizes have lowered by approximately 15-17% over a few years. Saleable areas for newly launched 2 BHK apartments in the years 2017 and 2018 came down to 963 sq. ft. as an average in comparison to 1130 sq. ft. previously offered by builders. This indicates a lowering of apartment sizes by around 15%. 3 BHK apartments have witnessed sizes coming down by 17% for these two years as well with the average coming down to 1458 sq. ft. as compared to 1754 sq. ft. earlier. However, Hyderabad is an exception in this regard. Yet, saleable areas are reducing while carpet areas are also going up (percentage wise) for 2 and 3 BHK apartments alike.
According to Tanuj Shori, this is an indicator of more construction based efficiency in spite of saleable areas being lowered. Builders are now tackling the issue of mismatches in pricing by providing compact apartments in major cities which also have more efficient and better layouts. Buyers now have more space available which brings in greater value. The implementation of RERA which emphasizes more on the carpet area has also been a game changer in this context.
Tanuj Shori also stated that optimization in terms of sizes and prices should continue over the next few years. Mumbai is the top city in terms of reduction in apartment sizes. Average saleable areas for 2 BHK apartments have lowered to only 809 sq. ft. which indicates a drop of 25% from 1084 sq. ft. prior to the year 2017. 3 BHK apartments have seen a drop of 26% from 1710 sq. ft. to 1265 sq. ft. Pune has also witnessed the second highest drop in flat sizes as per reports. The average saleable areas of 2 BHK apartments have lowered to 867 sq. ft. from 1074 sq. ft. before the year 2017 and 3 BHK apartments have seen sizes coming down to 1323 sq. ft. from 1799 sq. ft. earlier. This indicates size reductions of 19% and 26% respectively.
Hyderabad, however, saw average saleable areas for 2 and 3 BHK apartments increasing over this period which is the only such exception across India’s metro cities. The increase has been marginal according to Tanuj Shori.
Square Yards is a technology-enabled, global real estate aggregator and India’s largest player for primary residential real estate. It’s subsidiary Square Capital is one of the largest marketplace for secured mortgages in India. Square Yards platform offers an integrated consumer experience & covers the full real-estate journey from search, discovery to research, transactions, home loans and post-sales service – fully integrating buyers to an extensive network of 500+ partner real estate developers, and 90+ banks & NBFCs. Square Yards is led by accomplished professionals, ex-bankers, and Ivy school alumni and is backed by the competence of more than 2500 employees in 30 cities and ten countries.