City developers appear to be cutting down apartment sizes to keep the cost of home ownership under check as they battle weak demand amid rising costs of construction.
House sizes during launch shrank over 11 per cent in the last five years with locations in central and east Calcutta contributing most to the overall squeeze.
As builders rush to launch products for the ‘affordable’ category — apartment cost below Rs 50 lakh — the imperative is more on how ‘to make every inch count’ by efficient and smart design.
A report by real estate consultancy Knight Frank says 86 per cent of launches in Calcutta during July-December 2019 period were under the Rs 50 lakh category, while 67 per cent of the sales came from that price bracket too.
“This is the only price bracket where there is sale momentum. There are multiple things going for this segment, starting from a low rate of GST (1 per cent) to interest subvention under central scheme. Hence, builders are looking to launch projects under this price pocket,” Swapan Dutta, branch director of Knight Frank, Calcutta, said.
The report noted that compared with the average apartment size of 1,241 sq ft in 2015 during launch, it has come down to 1,103 sq ft in 2019. In Central Calcutta (south of Park Street to AJC Bose Rd), the cut is sharpest to 2,000 sq ft from 3,150 sq ft
Sidharth Pansari, managing director of Primarc Projects, said developers were looking at this category because it has higher velocity of sale than other segment.
“By selling faster, we can save on the finance cost. But the layout has to be smart. Every inch must count. A buyer should feel that his or her needs are being met even in a smaller apartment,” Pansari said.
Even in the luxury segment, builders are learning from past experience and launching compact apartment rather than expansive ones. For instance, Trump Tower on EM Bypass, which offered less than half the floor plate compared to similar aspirational residential projects around the area, received better response from buyers.