This Diwali, growing demand for balconies and open decks amid the festive season has led realtors such as the Lodha Group, L&T Realty and others in the Mumbai Metropolitan Region (MMR) to offer apartments with balconies even in the affordable and mid-budget segments.
This is in addition to rebates such as zero stamp duty, gold, free car, bikes and foreign tours for those booking apartments this festive season.
However, there is also a trend of homebuyers ready to pay extra for an apartment provided it comes with a balcony or open deck, developers said.
Developers claim that following the Covid-19 pandemic, homebuyers are ready to give up as much as 10 percent of an apartment’s area for a balcony – even in one- and two-bedroom flats that range in size from 400 square feet to 800 sq. ft.
Buying an apartment in Mumbai is an expensive proposition – prices start at about Rs 15,000 per sq. ft and go as high as Rs 1 lakh per sq. ft in parts of south Mumbai and areas such as Bandra and Khar.
The history of balconies in Mumbai’s apartments – often described as matchbox-sized flats – goes back to the 1960s. Offering apartments with balconies was a common feature until the late 1990s, and until 2012, premium three- to four-bedroom apartments came with this amenity.
However, the pandemic made people realise the need for more open space in their homes and so developers are offering balconies even in the affordable segment, where a one-bedroom flat with a carpet area of around 400 sq. ft has a 30-40 sq. ft approximately balcony – something very unusual in the MMR.
Do home buyers need to pay extra for a balcony?
Homebuyers in Mumbai were used to developers who charged a premium for apartments with a balcony. However, after the rules changed in 2012, no extra premium could be levied by developers over and above the charge for the carpet area. Also, the Real Estate Regulation Act of 2016 allows a house to be sold only on the basis of its carpet area.
According to property consultants, there have been instances of developers quoting Rs 20,000 per sq. ft for an apartment without a balcony, but where there is a view of a forest, lake, or hill along with a balcony, the asking price would go up by 10-15 percent. There is no extra loading but the additional amount is recovered from homebuyers by increasing the per sq. ft rate for the view and the balcony.
Why did balconies go missing?
One reason the balconies disappeared was because apartment sizes shrank as property rates rose, leading to lack of space for a deck. Additionally, starting 2012, the Brihanmumbai Municipal Corporation started levying a premium and including the area of the balcony in the total consumed floor space index (FSI), resulting in homebuyers and developers losing interest in balconies considering it would add extra cost to the apartment.
"The pandemic changed all that and revived demand for balconies. With frequent lockdowns and work from home resulting in long Zoom calls and sitting hours, recreation and “me time” suffered. There is increased demand for balconies among homebuyers, especially post-Covid-19,” said Hiral Sheth Gandhi, director of marketing at Sheth Creators, a Mumbai-based developer.
“Potential homebuyers are considering investing in a home with a balcony, even though there is a premium involved in it.”
Also read: The case of Mumbai’s disappearing balconies—and their reappearance
Sheth Creators is constructing about 500,000 sq. ft of apartments across five projects in Mumbai, some with balconies and some without. Gandhi told Moneycontrol that balconies are sought even in the smaller, two-bedroom category.
Bengaluru-based Puravankara Limited, which launched two projects in the MMR over the past 18 months, offers balconies even in one-bedroom flats.
“The balcony as an amenity that was earlier available only in premium apartments of 3 and 4 BHK or duplex has now entered the mid-segment space of 1 and 2 BHK,” Sanjay Daga, chief operating officer of Puravankara–West, told Moneycontrol.
All the apartments in Puravankara’s Chembur project have balconies. The company said in its Shil-Phata project, the one-bedroom apartment with an area of 395/453 sq. ft has a 30-40 sq. ft balcony approximately.
Value addition
“This all has been possible as post-Covid-19, people want open spaces within their four walls and hence people are ready to pay for a balcony that measures between 40 sq. ft to 120 sq. ft in our projects across MMR. Also, because of this buyer preference, we are evidently mentioning about offering a balcony in all our marketing collaterals and brochures,” Daga added.
“People are willing to pay provided the balconies are designed well and make a value addition to the home they are purchasing,” an L&T Realty spokesperson said in an email response to Moneycontrol. “The pandemic has brought in a different flavour of owning a balcony home and hence the demand for homes incorporating a balcony has shot up.”
The company highlights the balcony feature in its marketing, especially in Mumbai, where apartment space is constrained.
Prashant Bindal, chief sales officer of the Lodha Group, said recently that people are now ready to pay for a balcony in their apartment. He said the share of buyers in the affordable segment (one-bedroom apartments) has shrunk to about 20 percent from 70 percent three years ago.
The Lodha Group has stopped making one-bedroom apartments and is now focussed on having apartments starting two-bedroom in all its projects. Bindal said this trend will continue for the next two to three years.
“Earlier, people (consumers) wanted decks and balconies, but they wanted it for free. Nowadays, consumers are ready to pay for it,” he said.
Currently, the Lodha Group is offering a balcony in its two-bedroom flats in two projects in the Kandivali area of suburban Mumbai and one project in Mira Road near Mumbai.
Balconies in demand during home upgrades
Demand for balconies has also shot up from buyers upgrading from one-bedroom apartments, according to developers and property consultants.
“First-time buyers who are just managing to purchase a home are not very picky or particular about balconies. It is the upgrade buyers who are very particular and asking for amenities like a balcony or deck,” said Dhiren Doshi, a property consultant.
In this context, the L&T Realty spokesperson said, “A 1 BHK customer is extremely price-centric and would like to get as much of usable area as possible. Hence, we avoid including balconies in the design for these apartments. Higher configurations (2 BHK and above) attract a balcony as a feature and hence it is planned most of the time.”
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