Smaller home units launched to lure the middle income group customers
Middle Income group individuals have been waiting for home prices to reduce and hence the developers have surplus inventory of the ready to move in units. The high net worth individuals (HNIs) have been using this as an opportunity to buy these units at substantial discounts and the developers are forced to do so as the demand is poor.
However if we study the real estate market in the last few years in the major metros and cities, we will see a new trend emerging. The developers are reducing the apartment sizes and making it affordable for the middle income group buyers.
There were more than 50,000 mid-segment units (1- and 2-bedroom-hall-kitchen units) launched in the top nine cities of India (Ahmedabad, Bangalore, Chennai, Gurgaon, Hyderabad, Kolkata, Mumbai, Noida and Pune) during the first quarter of 2014. We have observed a 6% reduction in the unit sizes and even studio apartments are launched to lure the young professionals who have not accumulated a corpus yet to do a down payment in a bigger apartment.
The trend is interesting as now the developers are working on the architecture and reducing the living room spaces as they used to take up more than 50% of the total unit size. Also the high end developers like DLF, Mantri, Shobha etc. used to give 3 balconies which they have brought down to 1, to reduce the unit size. Consequently, though the per square feet rates have increased by an average of 1 % during the period, the overall price of the apartments or “ticket size” has also been driven downwards by an average of 6 % within these cities.
Source- Mint
50000 mid-segment units launched in the top nine cities, high net worth individuals (HNIs), high net worth individuals(HNI), Middle Income group individuals
