While the average flat size in the top seven cities increased by 5 percent annually - from approximately 1,170 sq ft in Q1FY2022 to approximately 1,225 sq ft in Q1 FY2023 – those in Mumbai Metropolitan Region (MMR) and Chennai shrunk, a new report has said.

Chennai saw average flat sizes decrease by 6 percent - from approximately 1,250 sq ft in Q1FY2022 to approximately 1,175 sq ft in Q1FY2023. MMR saw average flat sizes decrease by 5 percent - from approximately 783 sq ft in Q1FY2022 to approximately 743 sq ft in Q1 2023 - data shared by property consultants Anarock showed.

MMR was the only city where the average flat size declined since 2018, from approximately 932 sq ft to approximately 743 sq ft in Q1FY2023. This is because there is a perception among developers that there is currently sufficient supply of larger format homes.

Also, while MMR is hyper-expensive, Chennai is a very cost-sensitive market. In both instances, increasing the supply of smaller, more affordable homes makes sense, according to data collated by Anarock

However, the average flat sizes in fresh supply hitting the top seven cities grew 7 percent in the last five years – from approximately 1,150 sq ft in 2018 to approximately 1,225 sq ft in Q1 2023. In 2022, the average flat size in these cities stood at 1,185 sq ft, and at 1,170 sq ft in 2021.

The National Capital Region (NCR) saw average flat size rise 50 percent -- from approximately 1,130 sq ft in Q1FY2022 to approximately 1,700 sq ft in Q1FY2023. Kolkata saw flat sizes increase by 44 percent -- from a modest 800 sq ft in Q1FY2022 to 1,150 sq ft in Q1 FY2023. Hyderabad saw average flat size increase by 29 percent from approximately 1,700 sq ft in Q1FY2022 to approximately 2,200 sq ft in Q1FY2023.

Pune saw a 16 percent annual increase - from 877 sq ft in Q1FY2022 to 1,013 sq ft in Q1FY2023. Bengaluru saw an 8 percent yearly jump in average flat sizes – from approximately 1,200 sq ft in Q1FY2022 to approximately 1,300 sq ft in Q1 FY2023.

Chennai saw average flat size decrease by 6 percent - from approximately 1,250 sq ft in Q1FY2022 to approximately 1,175 sq ft in Q1FY2023. MMR saw average flat sizes decrease by 5 percent - from approximately 783 sq ft in Q1FY2022 to approximately 743 sq ft in Q1FY2023.

"MMR is the only city where average flat sizes have reduced in the last five years - from 932 sq ft in 2018 to 743 sq ft in Q1 2023," says Anuj Puri, chairman, Anarock Group.

"In these five years, only 2020 saw average flat sizes in MMR see an annual rise of 21 percent against 2019. Since 2020, homes in the region are shrinking," he said.

NCR sees highest growth in average flat size

Among the top seven cities, NCR saw the highest growth in average flat size in the last five years – from approximately 1,250 sq ft in 2018 to approximately 1,700 sq ft in Q1FY2023. Developers in NCR are closely tracking demand and launching bigger homes in this region.

Hyderabad has the highest average flat size -- at approximately 2,200 sq ft in Q1 2023, followed by NCR with approximately 1,700 sq ft. In Chennai and Bengaluru, the average flat sizes stand at approx. 1,175 and 1,300 sq ft, respectively. In Kolkata, the average flat size was approximately 1,150 sq ft. In Pune, the average flat size clocks in at approximately 1,013 sq. ft.

“Before COVID-19, apartment sizes were shrinking annually to meet the demand for compact homes prevalent then," says Puri. "The central concerns were affordability and millennials’ preference for low-maintenance homes. Year 2020 saw an abrupt reversal of buyer preferences. With a sudden emphasis on work from home (WFH) and study-from-home culture, flat sizes began increasing for the first time in four years,” said Puri.

In 2023, property prices are heading north but demand for bigger homes continues. Q1FY2023 saw average apartment sizes in the top seven cities increase by approximately 7 percent since 2018, with MMR the only outlier with average home sizes reducing around 20 percent in the period.

Source: moneycontrol.com

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