MMR's Flat Size Conundrum: Can Mumbai Adapt to Changing Consumer Preferences?
Despite nationwide growth in luxury housing, MMR sees limited increase in flat sizes due to high property prices and limited space.
MmrMumbaiLuxury HousingReal EstateIndiaReal Estate MumbaiAug 19, 2024
The year 2020 was an exception for MMR, as it recorded a noteworthy 21% increase in flat sizes compared to 2019. However, the average size peaked in 2022 at 840 square feet before experiencing a decline of 5% in 2023. This trend highlights the unique challenges faced by the MMR, where high property prices and limited space restrict the feasibility of larger homes.
In comparison, the National Capital Region (NCR) has seen remarkable growth in flat sizes, with an average size of 2,450 square feet recorded in the first half of 2024. This represents an incredible 96% increase from 1,250 square feet in 2019. Hyderabad follows closely behind with an average flat size of 2,010 square feet, while Chennai and Bengaluru report average sizes of 1,450 and 1,630 square feet, respectively. Kolkata and Pune add to the landscape with average flat sizes of 1,125 and 1,103 square feet.
The data shows that luxury homes drove much of the growth in NCR, where 77% of the new housing units launched in the first half of 2024 fell into this segment. Approximately 24,300 units were launched across various price ranges, with 18,600 units classified as luxury. This surge reflects a shifting preference among buyers towards larger living spaces, likely fuelled by lifestyle changes brought about by the COVID-19 pandemic.
While the MMR's flat sizes remain comparatively small, this trend is indicative of broader housing dynamics in urban India. The pandemic reshaped consumer preferences, leading many to seek bigger homes with more space. However, in Mumbai, soaring property prices have constrained this trend. Buyers in MMR find themselves limited in options, often opting for smaller flats in prime locations rather than larger units further from city centres.
In addition to the size disparities, rising prices across key markets are affecting homebuyers' decisions. Data indicates that in 2023, the average flat size across the top seven cities in India was 1,420 square feet, reflecting a 7% increase in just six months. As prices continue to rise, it remains to be seen whether Mumbai can adapt to the changing preferences of its residents.
The real estate market in Mumbai is at a crossroads, needing to address the demands for larger living spaces without further escalating costs. Developers may need to rethink their strategies, focusing on creating affordable yet spacious housing options. This shift could help MMR better align with the trends seen in other major cities and meet the needs of homebuyers looking for more generous living accommodations.
As urbanisation continues and the demand for housing grows, understanding and responding to these trends will be crucial for real estate stakeholders in Mumbai and other major cities in India. The need for balance between affordability, space, and prime locations is more important now than ever, as residents navigate their choices in a post-pandemic world.
About Anarock Group:
Anarock Group is a leading real estate consulting firm in India, providing expert advice and research-driven insights to clients across the country. With a strong presence in major cities, Anarock Group helps buyers, sellers, and developers navigate the complex Indian real estate market.
Frequently Asked Questions
What is the average flat size in MMR?
The average flat size in MMR is 825 square feet, as of early 2024.
Which city has seen the most significant growth in flat sizes?
The National Capital Region (NCR) has seen remarkable growth in flat sizes, with an average size of 2,450 square feet recorded in the first half of 2024.
What is driving the growth in luxury homes in NCR?
The growth in luxury homes in NCR is likely fuelled by lifestyle changes brought about by the COVID-19 pandemic, with 77% of new housing units launched in the first half of 2024 falling into this segment.
How are rising prices affecting homebuyers' decisions in India?
Rising prices across key markets are affecting homebuyers' decisions, with data indicating that the average flat size across the top seven cities in India was 1,420 square feet in 2023, reflecting a 7% increase in just six months.
What needs to change in the Mumbai real estate market?
The real estate market in Mumbai needs to address the demands for larger living spaces without further escalating costs, with developers potentially rethinking their strategies to create affordable yet spacious housing options.
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