The slowdown in the Indian economy has impacted the real estate industry and forced developers to move away from large villas in favour of apartments.
A report released by a private real estate consultancy stated that while out of 5.45 lakh units launched in 2014, nearly 5% were villas, in 2019, this share dropped to 2% of the total of 2.37 lakh units launched during the year.
This downward trend has been evident in the eastern, western and northern regions since 2014, the report states. “Today, the southern cities of Hyderabad, Bangalore and Chennai also showcase the declining villa trend as both builders and buyers move towards high-rise apartments owing to lesser cost of ownership,” said the report.
The report by Anarock, a real estate consultancy, said that in Gurugram around 73% homebuyers in 2019 bought an apartment in a high-rise instead of investing in plots or villas.
City-based realty experts opined that price of the property was also the factor that motivated people to go for apartments.
“A builder can develop 50 flats on one acre of land in Haryana and the ownership of this land is divided among 50 buyers. This reduces the cost of owning a flat,” Sanjay Sharma, a city-based consultant said, adding that a single villa is built on an average of 250 sq yards, thus the price.
Experts also opined that preference for apartments was more because people were embracing a lifestyle in condominiums. “There are clubs, play areas for children and gyms. Issues such as maintenance and security are well taken care of. The facilities and amenities are shared. It is quite costly to get the same level of living in a villa or a plot,” said Vinod Behl, an analyst.
With villas witnessing lesser sales, the developers also preferred to launch high-rise projects. Out of 41 projects that were launched in the city during 2019, at least 73% comprised of high-rise buildings with G+20 floors or above.
Noida saw launch of 11 projects during the year, of which nine had high-rise towers. Similarly, Greater Noida also saw the launch of 11 projects in 2019, of which 63% projects had high-rise towers.
Cities such as Ghaziabad, Faridabad, Delhi and Bhiwadi altogether saw new launch of nearly 26 projects of which 62% were high-rises.
Across the country, the report said, land-scarce MMR (Mumbai Metropolitan Region) topped the list with over 75% of the total 734 project launched in 2019 in the high-rise category. NCR came next with nearly 70% of its total launched projects in the high-rise category.
“The increasing trend of vertical development has taken the sheen off a once highly-preferred property type—villas. Both demand and supply of this format are diminishing,” Anarock Properties chairman Anuj Puri said.