Builders reduce apartment sizes to suit buyers' affordability

MUMBAI: Weakening sales and rising inventory levels in the backdrop of unaffordable housing prices are pushing realty developers to tweak their product strategies. Builders across markets are constructing apartments with smaller configuration with an objective to make houses affordable for buyers by reducing average apartment size rather than reducing the capital values.

Mumbai Metropolitan Region (MMR) including Mumbai, Thane and Navi Mumbai witnessed the maximum fall in apartment sizes on annualised basis in the last five years, along with Bangalore, Chennai and Kolkata.

In Mumbai, which is already known for smaller and compact houses, has seen the average apartment size shrinking by 26.4 per cent in the last five years. Average size of residences in Bangalore, Chennai and Kolkata also stand reduced by 22-24 per cent, showed a study by property consultancy JLL India.

"Builders are exploring innovative ways to make residential housing across major cities more appealing to potential buyers at a time when it is increasingly becoming difficult to sell expensive apartments. They are emulating the famous sachet marketing strategy adopted by FMCG companies in the late 1990s,” said Anuj Puri, Chairman & Country Head, JLL India.

According to the report, home-buyers' preference is changing with time. Several urban buyers are increasingly looking for new homes near their office locations which could be small in size. They prefer a house that is "sufficient” enough for his family requirements. This does not mean that they are compromising on their lifestyle, they prefer a small compact home equipped with all basic amenities.

Buyers are increasingly opting for homes that are closer to work-places in order to reduce commute times. As these locations are expensive compared to the suburbs, buyers may be able to afford smaller units, which is more than acceptable.