Over the past few years, average apartment sizes are falling across all major cities, while consumers are demanding more lifestyle amenities; and entry of branded apartments is changing the real estate market in India, says a JLL India report
The past 10 years has been quire dynamic for Indian real estate as each of the fundamental 4Ps of real estate – players, processes, product and places, witnessed plethora of changes. Especially, for homebuyers, the recent changes and future transition will bring about a more transparent market that is not just sensitive to their needs, but also sensitive towards the ecology at large, says JLL India in a report.
JLL said, "The on-going transition within the real estate sector offers us a foretaste of what the near future beholds. We foresee sweeping changes in the way real estate developers conduct their business, particularly looking at the innovative practices and agility of certain new breed of developers. Corporate real estate teams will have to become more adept and skilful in order to make the most of the upcoming transition, and bring to light a rewarding portfolio for their companies."
Talking about residential sector, the report says, recent years have seen few transitions – falling apartment sizes, more lifestyle amenities, entry of branded apartments, and introduction of new concepts such as senior living and serviced apartments.
"Unable to sell expensive homes in a sluggish market, builders across India are making smaller apartments without lowering the price per square feet and compromising on the quality of product. In the last five years, we have seen that average apartment sizes are falling across all major cities of India," JLL said.
According to the report, Mumbai Metropolitan Region (MMR) witnessed the maximum fall in apartment sizes on annualised basis, along with Bangalore, Chennai and Kolkata. Other cities also witnessed varying degree of fall in median apartment sizes. The dynamics of apartment sizes have a tale to tell – that developers are paying conscious attention to consumers’ requirements.
"The fall in average apartment sizes across all top seven cities is a clear indication that developers intend to make houses affordable for buyers by reducing average apartment size instead of reducing the capital values. While property prices are not purely a product of developer’s discretion, the decision to alter apartment sizes as per the needs and spending power of buyers is definitely within their ambit," the report added.
Senior living is a new category of residential real estate that is emerging in India, JLL said, adding that at present, there are about 30-35 senior living projects at various stages of construction in the country. Since the concept is new, its contribution relative to the global senior living sector is minimal. As opposed to that, senior living homes accommodate 10% of the senior citizens in the United States and 4% in Australia. There is a huge demand-supply gap within the sector, which suggests the growth potential is immense, it added.
As India narrows its gap with real estate trends and practices of more advanced nations in the West and APAC, everyone from local developers, government, institutional investors and occupiers / homebuyers have got things to look up to. The relationship between developers and investors is poised to become more synchronised, enabling transition from family-driven real estate business towards a more institutionalised set-up. This will be a big positive for market transparency, as domestic real estate sectors will criss-cross to new heights. On the other hand, occupiers and consumers will have a variety of options of choose from, given the market segregation and growth of niche segments, which will enable choice on the basis of corporate and individual profile. Domestic and international stakeholders will keenly watch the government’s role as an enabler for smooth sailing through this new course of transition, the report says.
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