Real Estate Trends 2023: Demand for bigger homes soars in top Indian cities, Mumbai bucks the trend

Post-pandemic preferences among homebuyers have ushered in a new wave of demand for more spacious homes across India. An intriguing trend is emerging in the real estate markets of the top seven Indian cities, with an average seven per cent increase in home sizes recorded over the past five years.

However, Mumbai presents an interesting outlier, witnessing a 20 per cent decrease in the average size of new flats during the same period, according to a report by property consultancy firm ANAROCK.

Anuj Puri, Chairman of ANAROCK Group, attributed the rising trend of larger flats to the shift in work culture brought on by the pandemic, which necessitated a work-from-home and study-from-home culture. "2020 saw an abrupt reversal of buyer preferences. With a sudden emphasis on the WFH and study-from-home culture, flat sizes began increasing for the first time in four years,” Puri explained.

Despite rising property prices, the demand for bigger homes persists in 2023. However, Mumbai stands out as the only region where a reduction in average home sizes has been observed, decreasing by around 20 per cent since 2018.

The annual trends suggest a continued preference for larger homes, with Q1 2023 witnessing a five per cent increase from the previous year, from approximately 1,170 sqft in Q1 2022 to approximately 1,225 sqft in Q1 2023.

Here’s a look at housing trends in seven top cities across India:  

Average flat size on a decline in Mumbai

According to Puri, Mumbai was the only city amongst the top seven where average flat sizes reduced over the last five years. He elaborated, "In these five years, only 2020 saw average flat sizes in MMR (Mumbai Metropolitan Region) see an annual rise of 21 per cent against 2019. Since then, homes in the region have been shrinking."

The report showed that the average size of flats in these top seven cities has seen a significant increase, growing from approximately 1,150 square feet in 2018 to around 1,225 sqft in Q1 2023. In contrast, Mumbai has seen its average flat sizes shrink from 932 sqft in 2018 to a mere 743 sqft in Q1 2023.

Highest growth in average flat size in Delhi-NCR

Among all the major cities, a considerable growth in average flat size was noticed in Delhi National Capital Region (NCR). In the last five years the average flat size in Delhi-NCR increased from approximately 1,250 sqft in 2018 to an impressive 1,700 sqft in Q1 2023. This trend suggests that developers are successfully responding to the rising demand for larger homes in the region.

Largest average flat size in Hyderabad

Hyderabad topped the list for the largest average flat size in Q1 2023 at approximately 2,200 sqft, followed closely by NCR with approximately 1,700 sqft.

Housing Trends in Chennai

The average flat size in Chennai decreased 6 per cent from approximately 1,250 sqft in Q 2022 to 1,175 sqft in Q1 2023. This could suggest a perception among developers of an adequate supply of larger format homes, and a strategic move towards offering smaller, more affordable homes to cater to a cost-sensitive market.

Average flat size increases in Bengaluru

Bengaluru saw average flat sizes increasing by 8 per cent yearly from around 1,200 sqft in Q1 2022 to 1,300 sqft in the first quarter of 2023.  

Housing Trend in Kolkata

Average flat sizes in Kolkata increased by a significant 44 per cent yearly from a modest 800 sqft in Q1 2022 to 1,150 sqft in Q1 2023.

Housing Trends in Pune

Pune saw a 16 per cent yearly increase in average flat size from 877 sqft in the first quarter of 2022 to 1,013 sqft in the corresponding quarter of 2023.