NCR Developers not keen on Smaller Size apartments

In Delhi NCR’s red-hot real estate market, even a 5 crore budget may not guarantee a home in a brand-new project of a reputed developer in a prime locality.

With homes priced at 6 crore and above getting sold out within hours of launch, developers are not keen on launching smaller sized apartments, forcing end users to wait for the current uptick in the market to stabilise. The trend is also worrying industry experts as it is giving rise to speculative buying which might eventually cause a bubble in the property market.

“In the last 18 months, prices have almost doubled in the majority of the micro-markets in NCR and developers are also not launching smaller sized apartments. Both factors have taken away the opportunity for middle class buyers to own a home in the current situation. While the per sq ft prices may not come down, developers may have to reduce size to offer something in below Rs 5 crore category” said an industry expert.

“We believe prices will stabilise now and won’t go up for the next six-eight years. The market was down for a long time and any sudden uptick was expected, but the way new projects are coming up in the same price bracket is somewhat worrying. Buyers will currently have to hold their inventory for six-eight years, which is when another up cycle is expected,” said an expert.

Some developers feel projects should be sold over four to five years of its construction phase and not in one go.

“Lifecycle of a high-rise project is over five years and the developer should sell some part of it every year. The buyer is also confident of price appreciation in that case and the market is also able to absorb the inventories that are coming in,” said a developer.

The sharp recovery in the luxury residential real estate has led developers to add about 45% of overall luxury stock in the last five years alone. The segment has also grown at over 9% compounded annually since 2019 across major cities in India.