Small houses back in trend

Owing to sky-rocketing property prices, luxury apartments are losing their charm among the middle classes and small houses are gaining popularity again. Due to the massive slump in real estate market since the last couple of years, developers are now reducing the size of houses instead of decreasing the prices.

Top developers like Hiranandani, Kalpataru, Radius, Sai developers and Prajapati developers are coming up with projects having a large number of small apartments, industry observers report.

Pankaj Kapoor, MD at Liases Foras, a property research firm said, “The small size of flats gives dual benefit to the developers;  first , it helps them get tax benefit as developers constructing 30 sqm houses in non-metro locations are eligible for certain exemptions as per tax laws. Besides, the price of these apartments fits in the buyers’ budget.”

“There is a huge demand for smaller affordable houses. In a property exhibition held in Navi Mumbai recently, we received very good response from home buyers. We have to meet the demands of the people to survive and succeed in this kind of market,” said Harnam Singh of the Sawan Group.

Real estate agents are also disconcerted with the fact that people come to see the properties & make site visits, but once they start calculating, deals get aborted.

Further, vice-president of the Maharashtra Chamber of the Housing Industry (MCHI), Navi Mumbai, Manohar Shroff says that the demand for huge luxury apartments has fallen. Builders now have to construct houses in accordance with buyers’ demand. While many young couples prefer buying small houses in the beginning, most bachelors desirous of investing in property also find small houses the best option.

Cheer in the realty sector as home sales increase by 6%

Aided by stagnant pricing, discounts from builders and launch of new projects at lower prices led to increased Home sales by 6% in the January-March quarter from that a year ago across eight top cities of India, according to a report by property research firm Liases Foras.

For the first time since January March 2014, the total sales across eight tier 1cities crossed 60,000 units. “The gap between prices of apartments and affordability has reduced to some extent, which has helped sales. It is an end-user driven market today,” said Pankaj Kapoor, managing director of Liases Foras.

Real estate Sales in the National Capital Region were up 33% and in Mumbai 12%, while in Bengaluru sales dropped 18%. Ahmedabad went up 32% in property transactions, whereas Chennai and Hyderabad witnessed a 25 per cent and 20% growth respectively. Kolkata was up by 14% while sales in Pune declined by 25%.

Although Prices remained flat in Mumbai, NCR saw a correction of 3% from a year ago, helping developers push their stock. Ahmedabad is the only city to witness double-digit growth in prices at 12%, the report observed.

Sales of houses under Rs 25 lakh increased 46% in the past one year while sales in the Rs 25-50 lakh bracket grew 13%, signifying greater affordability of homes.

“With prices remaining stagnant over the past two years across  markets coupled with falling interest rates on home loans, more people have started buying homes,” said Getamber Anand, national president of the Confederation of  Real Estate Developers Associations of India.

“The economy is booming; money is being spent on infrastructure. If there are good rains this year, the impact on home sales would be even higher,” said Niranjan Hiranandani of the Mumbai based Hiranandani Group.

Pankaj Kapoor of Liases Foras said that, if builders in Mumbai are able to spruce property prices by a further 15 – 20%, home sales could perk up to three times of the number today.