Kolkata/Hyderabad: Real estate industry dynamics indicate residential real estate is at mid-cycle with average flat size increasing by 11 per cent in calendar 2023. Among the top seven cities, the average flat size in Hyderabad stood the highest at 2,300 sq.ft. in 2023, followed by the National Capital Region (NCR). Mumbai Metropolitan Region (MMR) saw the lowest average flat size at 794 sq. ft, according to a recent report released by ANAROCk Group.
Demand for bigger apartments refuses to wane despite life returning to normalcy across the country post-Covid-and rising residential prices. Latest ANAROCK data indicates that average flat sizes in the top seven cities have grown by 11 per cent annually last year – from 1,175 sq. ft. in 2022 to 1,300 sq. ft. in 2023. Back in 2021 and 2020, the average flat size across the top seven cities was comparable to 2022 - 1,170 sq. ft. in 2021 and 1,167 sq. ft. in 2020.
A deep dive into the data across the top cities reveals that MMR and Kolkata were the only two cities where the average flat sizes decreased in the last one year. In MMR, average flat sizes stood at 840 sq. ft. in 2022 and decreased to 794 sq. ft. in 2023 – a 5 per cent yearly decline. However, over 5 years, average sizes in MMR were similar to 2019 at 784 sq. ft.
In Kolkata, average flat sizes saw a 2 per cent yearly decline from 1,150 sq. ft. in 2022 to 1,124 sq. ft. in 2023. However, over 5 years, average flat sizes have risen by 12 per cent in the city. The average flat size in the city stood at 1,000 sq. ft. in 2019.
Among the top 7 cities, NCR saw the highest growth (37 per cent) in average flat size in the last one year – from 1,375 sq. ft. in 2022 to 1,890 sq. ft. in 2023. Developers in the region are actively tracking demand and launching larger homes - home-buyer demand is skewed significantly towards luxury apartments, which are primarily defined by bigger sizes.
Hyderabad has the highest average flat size in 2023 at 2,300 sq. ft., followed by NCR with 1,890 sq. ft. In the other southern cities - Chennai and Bengaluru – average flat sizes are 1,260 and 1,484 sq. ft., respectively. Pune's average flat size stood at 1,086 sq. ft. in 2023
"Northbound housing prices in the top cities have in no way dispelled the demand for generous living spaces," says Anuj Puri, Chairman of ANAROCK Group.
"The supply of bigger luxury homes increased significantly in 2023. ANAROCK data indicates that more than one lakh units (or approximately 23 per cent) 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. Led by an enduring 'new normal' in homebuyer preferences, this demand seems eminently sustainable,” Puri added.
Yearly, there has been an 11 per cent rise in average flat sizes in the top seven cities in 2023 against 2022. The five-year trend shows a 24 per cent rise – from 1,050 sq. ft. in 2019 to 1,300 sq. ft. in 2023. NCR again saw the maximum rise of average flat sizes in 2023 with 51 per cent, followed by Hyderabad with a 35 per cent rise in this period.
In NCR, the average flat size increased from 1,375 sq. ft. in 2022 to 1,890 sq. ft. in 2023, thus rising by 37 per cent on a yearly basis. Average flat sizes in Hyderabad witnessed a 30 per cent yearly increase, and a 35 per cent five-yearly rise.
In Bengaluru, the average flat size increased by 26 per cent in the year - from 1,175 sq. ft. in 2022 to 1,484 sq. ft. in 2023. On a five-yearly basis, India's 'Silicon Valley' saw a 16 per cent jump in average flat sizes, from 1,280 sq. ft. in 2019. Chennai saw a 5 per cent yearly jump in average flat sizes – from 1,200 sq. ft. in 2022 to 1,260 sq. ft. in 2023, and a 15 per cent five-yearly rise.
Kolkata and MMR were outliers, seeing a drop in average flat sizes in the year by 2 per cent and 5 per cent, respectively, the ANAROCK report adds. Broking firm Motilal Oswal believes that the existing demand-supply balance, low inventory, favourable affordability, and gradual price hikes should keep the real estate momentum intact for at least three to four years.
