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The reduced apartment sizes in new launches this year have contributed to making prices more affordable, according to global real estate consultants Cushman & Wakefield.
In the over 50,000 mid-segment units (1 and 2 BHKs) of newly launched houses across nine eight cities of this year, six cities have seen a reduction in sizes of approximately 100 square feet. leading to an average drop of six per cent in cost of the apartments within these cities, stated Cushman and Wakefield.
The report pointed that Mumbai, for instance, witnessed a reduction in apartment’s sizes by 12 per cent contributing to the ease in cost of apartments by 9 per cent over last year.
Other markets that saw unit sizes drop were Ahmedabad (8%); Chennai (3%); Hyderabad (9%); Pune (6%); and Gurgaon (3%). "However, in the same period the benchmark pricing of these areas (price per sf of new launches) is not disturbed as far as possible. The ticket prices of these locations have seen a decline to infuse more affordability into the system despite some of the locations witnessing an increase in the average uprice per square feet," the report added.
However, markets of Kolkata and Bangalore were exceptions to this trend. In these markets, both unit sizes of apartments as well as the per square foot rate have increased. Correspondingly the cost of apartments have also increased by 18 per cent in Kolkata and 7 per cent in Bangalore. "This is indicative of a strong end-user driven market that is catering to the large middle class population within these cities," added the report.
Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield, said: “Residential sector is banking on end-user driven demand and hence developers are tweaking products to make them more affordable. It also signals a degree of stress among developers, which is forcing them to launch products to inject doses of robust sales numbers into their balance sheets. Affordability holds the key right now; end-user buyers have been shying away from making purchases for a long time owing to lackluster economic conditions and resultant low confidence.”
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