Gurgaon builders reduce apartment size to make them more affordable, revive demand
Traditionally, Gurgaon’s apartments range in area from 1,800 to 6,000 square feet, according to Surabhi Arora, a senior associate director at Colliers International India, a real estate consultancy.
The days of large, swanky flats in Gurgaon may be taking a back seat for a while. Real estate developers are reducing the size of apartments to make them more affordable and prop up the housing market in the satellite town, where slowing sales have been made worse by demonetisation.
Traditionally, Gurgaon’s apartments range in area from 1,800 to 6,000 square feet, according to Surabhi Arora, a senior associate director at Colliers International India, a real estate consultancy. “In the recently launched projects, the area of apartments is anywhere between 1,100 to 1,600 sq. ft.,” Arora said.
According to brokers, the prices of these smaller apartments vary from Rs 60 lakh to Rs 1 crore. Over the past year, developers have trimmed apartment sizes, claiming they’re launching a different category.
At Tata Housing’s Tata La Vida located off the Dwarka Expressway, there are two- and three-bedroom apartments with areas from 1,276 to 1,579 sq. ft. At Supertech Azalia in Sector 68 on Sohna Road, the flats come in two sizes: 1,020 and 1,225 sq. ft. M3M’s Sierra in Sector 68 offers seven types of flats, ranging from 1,197 to 1,545 sq. ft., and ILD’s GSR Drive in Sohna has units ranging from 985 to 1,335 sq. ft.
“Smaller-sized units have become popular due to affordability factor and changing profile of home buyers,” said RK Arora, chairman of Supertech Ltd. “The trend for smaller units is likely to continue as families become smaller and more single working individuals buy property. Further, it is much easier to maintain small-sized apartments even as builders offer a wide range of facilities even with such units, including parking space, clubhouse and swimming pools.”
The growing popularity of smaller apartments ties in with the government’s emphasis on affordable housing. The finance minister proposed in the budget earlier this month to grant infrastructure status to affordable housing, which will allow developers to borrow funds at a lower cost.
“The time ahead will be completely dominated by the affordable housing segment as the government has also stressed towards diminishing the shortage of over 2 crore housing units in the country,” said Pradeep Aggarwal, chairman of Signature Global Group, a Gurgaon-based developer. “New project launches have shifted mostly towards the affordable housing segment supporting the Housing for All mission.”
The sale of residential property in Gurgaon plunged to about half of the peak numbers in 2016, while new launches, too, declined. Only 6,700 units were launched last year, which is one-third the level in 2015, according to a report by Colliers International India.
Delays in completion of projects and lack of infrastructure development in emerging corridors such as the Dwarka Expressway – another road linking Gurgaon and New Delhi – adversely impacted demand. The central government’s demonetisation move, scrapping Rs 500 and Rs 1,000 notes in November, made the situation worse. Transactions almost came to a halt in the last two months of 2016.
Speculators who fuelled demand during the peak times have all but disappeared from the residential market due to the fall in the percentage of their profit in the resale market. Those remaining are end-users.
“Before demonetisation, we were looking at a 65:35 ratio between end-users and investors. That changed to 90:10 post-demonetisation,” said Avneesh Sood, a director at Eros Group.
In the past couple of years, slowing sales have brought drown prices by about 10% in Gurgaon. Even after discounts and incentives offered by developers, buyers have kept away. Traditionally known as a luxury real estate destination, Gurgaon has a high supply of units with a price tag of Rs 1 crore and above. End-users comprising middle-class and service-class home buyers find such high property prices out of their reach.