Realtors develop smaller apartments to drive house sales
New Delhi- Many developers in India have started to reduce the size of units in their projects in order to increase home sales.
Without cutting the price per sq ft area, the developers are opting to cut the size of the units which seems to be based on the concept of “sachet marketing” adopted by FMCG companies.
Mumbai-based renowned Lodha Group had recently launched a luxury project ‘Blue Moon’ in Lower Parel which offers 2 BHK apartments with 1,370 sq ft. It had offered the units at an 18 percent discount to the market rate and within 10 days, the developer cleared its entire inventory. Among all the units, apartments priced 3.5 to 6.75 crore witnessed the highest demand.
Amrapali recently launched the fourth phase of its Silicon City with a minimum apartment size of 1,350 sq ft. In comparison, earlier phases of the project had apartments with a minimum size of 1,600 sq ft. Supertech launched its latest project Golf Village on the Yamuna Expressway near Delhi which comprises of apartments starting from 1,000 sq ft as the company is finding it difficult to sell larger apartments.
Chaubey Realties is offering compact 1-bedroom units of 639 sq ft in Mumbai suburbs. In Bangalore, the Brigade Group has reduced apartment sizes to 950-1,150 sq ft in its project Brigade Meadows from 1,200-1,600 sq ft in earlier projects, bringing down the ticket size considerably.
Amrapali Developers has recently launched apartments in Delhi-NCR with an area of 550 sq ft, a size which is mostly unheard of in the NCR, especially from big builders. Homes in the NCR are usually large compared with Mumbai.
Another realty major, Godrej Properties, announced a project in the Dwarka-Manesar Expressway. While all other projects around it are still waiting for buyers, Godrej sold all its 700 apartments on the launch day itself. In the same area, Emaar MGF also sold 250 units in its project Gurgaon Greens within a week in January by pricing it at Rs 6,000 per sq ft while other projects in the vicinity were priced at around Rs 7,000 per sq ft.
In the prime cities of India, the realty prices are far higher than they should be, said a realty expert. Finding the right price point is what matters the most. Nowadays, top builders seem to be taking the lead in altering the market scenario and thus forcing others to rethink.
L&T Realty launched Emerald Isle in Mumbai’s lakeside Powai area at Rs 15,500 per sq ft, creating a flutter in the area where the market rate is over 17,000 per sq ft. Nirman Realtors & Developers launched its project at Malad at a 20 percent discount for bulk buyers and sold most of its flats.
Many developers are trying to increase home sales through disruptive pricing, observe experts. Bangalore-based Provident Housing, in a newly launched property, sold around 270 apartments within 10 days by reducing the size of the apartments.
Bangalore’s leading realty developer Prestige Group, which historically did only large-sized apartments between 1,300 sq ft and 1,800 sq ft, has also reduced floor sizes in Prestige Tranquility which is being developed in off Old Madras Road in Bangalore.
Owing to sluggishness in the market, home sales across the country has been lagging behind from the past few years. Home buyers have been waiting for prices to come down and this has pushed up the level of unsold home inventory to 5.5 lakh homes at the end of the December quarter. At the current absorption rate, this would take another 2-3 years to clear the current inventory.
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