Millennial impact: Average property size in top 7 cities shrinks 17% in 5 years

With millennial homebuyers preferring small sized, affordable homes located within the main city, the top seven Indian cities collectively saw the average apartment sizes shrink nearly 17 percent between 2014 and 2018, says a new report.

With property prices going overboard in most metros, developers have also been reducing sizes to align their offerings more with the actual homebuyer demand.

Among the top cities, Mumbai Metropolitan Region (MMR) topped the list with a 27 percent average decrease in apartment sizes – from 960 sq ft in 2014 to 700 sq ft in 2018. Bengaluru saw the least decline in average property size at around 12 percent in five years. The current average apartment size in Bengaluru is 1,260 sq ft, says ANAROCK Research.

Currently, Hyderabad has the highest average property size at about 1,600 sq ft. The city saw sizes decreasing by 13 percent.

The maximum reduction in average property sizes was seen in the budget housing segment priced less than Rs 40 lakh. The average size of homes priced below Rs 40 lakh was 750 sq ft in 2014, and it reduced by 23 percent in 2018.

Interestingly, apartment sizes in the luxury housing segment (priced above Rs 80 lakh) also saw a 20 percent reduction over the last five years. The average size of properties in this segment was 1,830 sq. ft. in 2014, which came down to 1,460 sq. ft. in 2018.

Mid-segment housing priced between Rs 40 to 80 lakh saw the least size reduction of 17 percent - from 1,150 sq. ft. in 2014 to around 950 sq. ft. in 2018.

The reduction in flat size has invariably been achieved by the elimination of extra balconies - and in many cases all balconies - and better apartment designs that allow more efficient use of smaller spaces.

A major factor contributing to the shrinking apartment sizes across most metros is the rising demand for budget-friendly housing.

Besides, affordability, another reason for shrinking apartment sizes is that most millennial homebuyers are averse to investing in both the higher maintenance costs and extra efforts that larger properties entail.

Compact housing is the fastest seller on the resale market, so such homes gives millennials both locational and financial flexibility while simultaneously allowing them the security and investment advantages of homeownership.