Home sales have dipped 9% while new launches have dropped 47% between Jan and June in the MMR
Mumbai : As potential home buyers are staying away from purchasing property and waiting for the economy to overcome its worst downturn, the developers seem to have found a tweak to address that challenge and make homes affordable. Developers who are failing to push sales of residential apartments owing to a sluggish market are reducing size of the apartments without reducing the price per square feet or compromising on the quality. The size of apartments in the Mumbai Metropolitan Region (MMR) has gone down by 26.4% compared to the average apartment size in 2010, a report from real estate consultant, Jones Lang LaSalle stated.
Another recent report by property advisory Knight Frank India Pvt. Ltd suggested that home sales have dipped 9% while new launches have dropped 47% between January and June in the MMR.
According to the JLL India report, Mumbai Metropolitan Region (MMR) witnessed the maximum fall in apartment sizes on annualised basis, along with Bangalore, Chennai and Kolkata. Other cities also witnessed varying degree of fall in median apartment sizes. The dynamics of apartment sizes have a tale to tell – that developers are paying conscious attention to consumers’ requirements. “Unable to sell expensive homes in a sluggish market, builders across India are making smaller apartments without lowering the price per square feet and compromising on the quality of product. In the last five years, we have seen that average apartment sizes are falling across all major cities of India,” JLL India said.
With the fall in the average apartment size, it is a clear indication that developers want to make houses affordable. “While property prices are not purely a product of developer’s discretion, the decision to alter apartment sizes as per the needs and spending power of buyers is definitely within their ambit,” the report added.
Meanwhile, amid the loom and gloom of the industry, a trend noted in the JLL India report points out that mid and upper-mid category homes have also shown strong preference for luxury amenities in a bid to improve their quality of life, which was earlier limited to high-end apartments only. Middle and Upper-Middle category buyers now seek amenities such as swimming pool, gymnasium, club house, open green lawns, jogging tracks etc. “On the back of changing demographics (a population that is becoming younger) and rising income, Indians have expressed their desire to alter their lifestyles as we have witnessed over the last few years. Realising the demand for such apartments, developers have offered projects that meet both ends – affordability for the city homebuyers as well as quality of life experience,” the report stated.
It is, however, debatable if this trend will percolate into affordable housing category. But, the report suggests that with incomes are rising faster and people occupying affordable homes in future would also prefer to have few of those basic amenities.
The report added, “However, given that pricing becomes an overriding factor, many affordable projects will have to depend on external facilities such as private sports complexes, private gymnasiums etc. The phenomenon may be largely restricted to mid-segment housing only.”
