Indians are homing in on larger, more premium dwellings. Developers are encouraging the trend with beguiling offers – GST and EMI waivers, fixed interest rates for select periods post tie-ups with banks, among others.
The average Indian home size in demand is up by at least 50 per cent, post-Covid, to “a minimum 1,000 sq ft”, and each unit is now costlier by 10-15 per cent compared to five years ago, developers said.
Once deemed as “premium”, homes in the Rs 70 lakh – Rs one crore price bracket are now considered mid-market, accounting for a major chunk of the market, “and have out-paced growth in the sub-Rs 50 lakh segment”.
Super-premium homes of ₹2-₹4 crore are re-drawing NRI interest for investment purposes.
“Average home size demanded in terms or carpet area is around 1,000 sq ft and people are upgrading to larger ones post Covid. The average member per family is 4 or 5 and requirement is for three-bedroom apartments at least, where most of the upgrade is happening. Pre-Covid apartment size demand was mostly smaller (two bedrooms),” Boman R Irani, President, CREDAI, told businessline.
A recent ANAROCK report said average flat size grew seven per cent from 1,150 sq ft in 2018 to around 1,225 sq ft in Q1 2023. In 2022, the size was 1,185 sq ft, slightly higher than 2021’s 1170 sq ft.
New launches are expected to cross 3,00,000 units as demand remains robust, said Anshuman Magazine, Chairman and CEO – India, South East Asia, ME & Africa, CBRE. Over 1,50,000 units were launched in H1, and increased launches are projected in H2.
According to him, offers in the market include flat discounts, EMI waivers, GST exemptions, free registration and stamp duty, and flexible payment schemes for complimentary amenities such as modular kitchens, car parking, or fully furnished apartments.
The increase in demand continues despite homes turning costlier.
In the April – June period, housing prices rose 7 per cent YoY on the back of stable demand and moderate hikes in mortgage rates.
According to Shekhar G Patel, President (Elect), CREDAI and MD of Gujarat-based Ganesh Housing, there was a 30 per cent rise in construction cost over five years between 2017 and 2023. A commensurate increase in home rates works out at 10-15 per cent, depending on the micro-market conditions.
(The writer is in Egypt at the invitation of CREDAI.)