Downsizing of Apartments to Achieve Affordability

The rising levels of inventory and weakening sales along with unaffordable prices of housing have pushed real estate developers to reform their product strategies. Builders across various markets are building apartments with smaller configuration sizes to make houses more affordable to buyers. They have adopted this strategy rather than reduce capital values.

The Mumbai Metropolitan Region including Navi Mumbai, Thane and Mumbai has seen maximum reduction in the sizes of apartments on an annual basis. The average size of 2BHK flats has been reduced by 26.4 percent in the last five years. The trend of 1.5 BHK and 2.5 BHK is becoming popular in many projects. This approach offers needed facilities in compact configuration.

Developers have decided to follow the same line of production as FMCG companies did with sachets. Even though developers cannot alter property prices whenever they feel like it, they have considerable control over the sizes of flats and can redraw them to fit the budget of consumers.

Developers are currently focusing on all those things that are required by buyers hence are reducing waste of space. They have changed their strategy because affording unnecessary luxury is not the cup of tea of every buyer. As per a report released in the CII annual realty conference, preference of home buyers is altering over time.

More numbers of urban home buyers are seeking property close to their offices. This is mainly to reduce the time taken to commute to and from work. But the flats are more expensive than the suburbs. So, they do not hesitate to compromise on the size of the property. They would rather live in a unit that suffices the entire family’s need. For enjoying larger homes with better amenities, consumers have to move to peripheral areas.

References:

http://economictimes.indiatimes.com/wealth/news/builders-reduce-apartment-sizes-to-suit-buyers-affordability/articleshow/48265786.cms
http://economictimes.indiatimes.com/wealth/news/builders-trim-average-flat-sizes-by-upto-26-in-last-5-years-jll/articleshow/48543805.cms
http://marketingstrategy-sai.blogspot.in/2010/03/sachet-revolution.html
http://www.moneycontrol.com/master_your_money/stocks_news_consumption.php?cat=realestate&autono=2571341