Mumbai: Unable to sell expensive homes, builders are now exploring innovative ways, including reducing the size of apartments to make them more cost-effective, property consultant Jones Lang LaSalle said in a report.
“Builders are exploring innovative ways to make residential housing across major cities more appealing to potential buyers at a time when it is increasingly becoming difficult to sell expensive apartments,” it added.
According to the report, builders across the country who are unable to sell expensive homes in a sluggish market, are making smaller apartments without lowering the price per square feet and compromising on the quality of product.
Builders around the country are emulating the famous sachet marketing strategy adopted by FMCG companies in the late 1990s, it said.
In last five years, average apartment size has been falling across all major cities of India, JLL pointed out.
Mumbai Metropolitan Region (MMR) witnessed the maximum fall in apartment sizes on annualised basis, along with Bengaluru, Chennai and Kolkata.
While the average size fell 25.4 per cent during the period in MMR, it reduced by 23.7 per cent in Bengaluru, 24 per cent in Kolkata and 22.2 per cent in Chennai.
On the other hand, NCR-Delhi, Pune and Hyderabad witnessed a fall of 9.7 per cent, 7 per cent and 6.5 per cent, respectively.
“Other cities also witnessed varying degree of fall in median apartment sizes. The dynamics of apartment sizes have a tale to tell – that developers are paying conscious attention to consumers’ requirements,” the report said.
JLL further said the fall in average apartment sizes across all top seven cities is a clear indication that developers intend to make houses affordable for buyers by reducing average apartment size instead of reducing the capital values.
“While property prices are not purely a product of developer’s discretion, the decision to alter apartment sizes as per the needs and spending power of buyers is definitely within their ambit,” JLL said.