Average home sizes in fresh supply across the top seven cities in India grew 7% in the last five years – from approximately 1,150 square feet (sq ft) in 2018 to about 1,225 sq ft in Q1 2023 - a new report by property consultancy Anarock revealed on Monday.
While the National Capital Region witnessed the highest growth of 50% in average apartment sizes - to 1,700 sq ft in the last year, Hyderabad had the highest average flat size at approximately 2,200 sq ft in Q1 2023.
“Before Covid-19, apartment sizes were shrinking annually to meet the demand for compact homes with central concerns of affordability and millennials’ preference for low-maintenance homes," said Anuj Puri, Chairman, Anarock Group, adding that with a sudden emphasis on work-from-home and study-from-home culture, flat sizes began increasing for the first time in four years.
Another factor prompting the rise in average sizes of flat is the fact that more new supply is coming in the mid, premium and luxury segments (Rs 40 lakh onwards) post the pandemic and these homes have an advantage of relatively bigger size than those in the affordable segment, he explained further.
On the flip side, Chennai and the Mumbai Metropolitan Region (MMR) emerged as outliers where the average apartment sizes registered a 6% and 5% yearly fall, respectively. The report gave MMR’s hyper-expensive and Chennai’s cost-sensitive markets as reasons for this.
Others agreed.
"MMR and Chennai markets have bucked the larger trend due to a significant spike in land, construction and input costs," reasoned Angad Bedi, managing director of BCD Group.
Average prices in the same five-year period across the top 7 geographies saw a 15% rise – from Rs 5,519 per sq ft in Q1 2018 to nearly Rs 6,325 per sq ft in Q1 2023 - data from the consultancy showed. This surge is largely attributed to inflationary trends in input costs and overall construction costs, Puri highlighted in an email conversation with DH.
"Though the economy is pretty much resilient, there has been a hike in construction costs, land prices and other input costs," seconded Navin Dhanuka, MD and chief executive of ArisUnitern RE Solutions Pvt Ltd, adding that the 18% GST that developers have to pay can be considered as another key reason.
Bengaluru saw an 8% year-on-year jump - from approximately 1,200 sq ft in Q1 2022 to approximately 1,300 sq ft in Q1 2023.
In 2023, property prices are heading north but the demand for bigger homes continues, the report noted.