Hyderabad is witnessing a notable shift in the residential property market, with a recent report revealing that buyers in the city are increasingly opting for smaller apartments. This trend stands in stark contrast to the growing average sizes of flats observed in other major Indian cities.
According to a study by Anarock Property Consultants, Hyderabad is the only significant city where the average apartment size has declined by 13% between 2023 and the first half of 2024. Despite this recent contraction, Hyderabad’s apartments remain among the largest in India, with an average size still exceeding 2,000 square feet (sft). Over the past five years, the city’s apartment sizes have increased by 18%, from 1,700 sft in 2019 to 2,010 sft in 2024. The recent drop in average size has emerged only in the last two years.
The reduction in apartment size is attributed to a strategic response to market dynamics and a slowdown in the luxury segment. Santhosh Kumar, Vice-Chairman of Anarock Group, notes that the new supply in the luxury category has decreased significantly in the first half of 2024 compared to the previous year. In the first half of 2024, luxury units accounted for nearly 29% of new launches, down from over 41% of the total new supply in the previous year. This shift has impacted the average size of flats, as luxury properties typically feature larger living spaces.
In contrast, other major cities in India have seen an increase in apartment sizes during the same period. The National Capital Region (NCR) now leads with the largest average flat size of 2,450 sft in the first six months of 2024, surpassing Hyderabad. This trend highlights a broader shift in consumer preferences and market conditions, with Hyderabad’s property buyers increasingly favouring more compact living spaces. This adjustment reflects a balancing act between maintaining high living standards and adapting to changing economic conditions in the real estate sector.
