NEW DELHI: Despite a near double-digit growth in real estate prices, average flat sizes in the country’s top seven cities grew by 11% annually last year – from 1,175 sq. ft. in 2022 to 1,300 sq. ft. in 2023, according to the latest report by property consultancy firm Anarock.
In 2021 and 2020, the average flat size across the top 7 cities was comparable to 2022 - 1,170 sq. ft. in 2021 and 1,167 sq. ft. in 2020. The 5-year trend shows a 24% rise – from 1,050 sq. ft. in 2019 to 1,300 sq. ft. in 2023.
Anarock report says that the National Capital Region (NCR) saw the highest growth (37%) in average flat size in the last one year – from 1,375 sq. ft. in 2022 to 1,890 sq. ft. in 2023. The NCR region was followed by two IT and tech hubs- Hyderabad (up 30%) and Bengaluru (up 26%). MMR and Kolkata were the two cities where the average flat sizes decreased in the last one year.
“The supply of bigger luxury homes increased significantly in 2023. Anarock data indicates that more than one lakh units (or about 23%) of the total new launches in 2023 were in the luxury category. The demand for bigger-size homes was kick-started by the pandemic, but there are no signs of it waning three years later,” said Anuj Puri, Chairman – Anarock Group.
Evolving Lifestyle
Pradeep Aggarwal, Founder and Chairman, Signature Global (India) says that the trend for purchasing bigger homes has become more prevalent owing to the Covid induced lifestyle changes and consumers’ evolving behaviour.
“Homebuyers are more inclined towards aspirational lifestyle and are opting for spaciousness, seeking value housing residences that provide versatile living spaces to accommodate various needs, such as home offices, gyms, or recreational areas. The desire for comfort and flexibility within the confines of one’s home has driven the trend towards bigger properties,” added Aggarwal.
Renu Singh, Director - Sales & Marketing, Aarize Group says that the decision to invest in larger properties aligns with the reported trend of rising demand for bigger houses. Homebuyers are increasingly seeking more extensive living spaces, potentially driven by evolving lifestyles, a desire for spaciousness, and an inclination towards luxury living.
Better return on investment
As the luxury housing segment, where flat sizes are generally bigger, is on a surge since the past two years, there is a belief in the market that money invested here can yield a better return.
“From an investment perspective, purchasing a larger property can indeed make strategic sense. Larger homes often appreciate substantially over the time, especially if located in growing and prime locations. The potential for increased square footage allows for creative renovations and upgrades, enhancing the property’s overall appeal and market value,” said Aggarwal.
Additionally, larger properties may attract a wider range of potential buyers or tenants, broadening the investment potential, added Aggarwal, whose real estate firm has a substantial presence in the Delhi NCR market.
Renu Singh of Aarize believes that from an investment standpoint, buying a bigger property makes sense in markets where there is a clear demand for larger homes.
“In regions like NCR, where the average flat size has seen a remarkable 51% increase over the past 5 years, investing in larger properties, especially in the luxury segment, could yield favorable returns,” said Singh.
However, individual considerations, market conditions, and investment goals should be carefully evaluated before making investment decisions, added Singh. The outliers: Mumbai and Kolkata Anarock data pointed out that across the top cities, MMR and Kolkata were the only two cities where the average flat sizes decreased in the last one year.
In Kolkata, average flat sizes decreased from 1,150 sq. ft. in 2022 to 1,124 sq. ft. in 2023, while in MMR it reduced from 840 sq. ft. in 2022 to 794 sq. ft. in 2023. However, on a 5-year basis, the cities saw average sizes rise - in MMR by a mere 1% between 2019 and 2023, but a 12% increase in Chennai in the same period.
Chennai saw a 5% yearly jump in average flat sizes – from 1,200 sq. ft. in 2022 to 1,260 sq. ft. in 2023, and a 15% 5-yearly rise.
The average flat size stood at 1,100 sq. ft. in 2019. Average flat sizes in Pune saw a 11% yearly increase to 1,086 sq. ft. in 2023 from 980 sq. ft. back in 2022.