The previous part in this series discussed the overall variations in growth of built-up area and real estate development in the peripheries and core areas of the eight metro cities. In this part, we will do a deep-dive into variations in sizes and prices of apartments, which are the dominant category of real estate in these eight metros.
The average size of new apartments is higher in the core areas of Hyderabad, Bangalore or Kolkata than any other cities, while Ahmedabad has flats of largest sizes coming up in their peripheries over time. The average size of the apartments have gone up over time in both cores and peripheries of the eight metros, most remarkably in Hyderabad, and is always marginally higher in the core, except for Ahmedabad. The higher size of the apartments in the core may be a function of the pricing and purchasing profiles of the buyers living in the core and the periphery of these metros. In Kolkata, the average size of flats are significantly higher in core than the periphery, referring to the sprawling of small size housing units in the city, as most of the new supplies there have come up in the periphery over the last 10 years. The graphs below show the size distribution of new supplies across the core and periphery of the eight metros from 2011 to 2019, which reveals a declining gap across cores and peripheries in terms of size of new supply, except MMR and Chennai.
What are the price trends?
The mean price (per sq.ft.) of these apartments also have significant variations across geographies, with the highest prices observed in the core areas of MMR, Chennai and Kolkata. While prices as a whole are lower in the peripheries, they follow different trajectories across the cities, as shown in the figure below. The price differential between the core and the periphery is minimal in Ahmedabad and Hyderabad, while it is high in Kolkata, Chennai and MMR. This partially explains lower size differences across the core and periphery in Ahmedabad and Hyderabad, and the higher size differences in Kolkata and MMR. Between 2011 and 2019, the mean price went up in Bangalore and Hyderabad in both the core and the periphery. In Chennai and MMR, the pricing gap across the core and the periphery widened over time, as prices went up in the core areas and stabilized in the peripheries. In other cities, the prices fell flat post-2015 in both cores and peripheries.
What are the variations in sales?
The share of sold units to total supply units also shows variation across cores and peripheries across the eight metros. Three distinct trends emerge from the chart above: a) Ahmedabad, Bangalore and MMR have registered a drop in share of sold units from 2011-19 in both cores and peripheries; b) Hyderabad, Kolkata and Pune have shown an increase in the proportion of sold units, with a much larger rate in the core than the periphery; and c) Chennai is the only city where the share of sold units has dropped in the core but increased in the periphery.
The diverging price trend across the cores and peripheries in Chennai can be attributed to the larger price differential across these spaces within the city, though there may be other factors contributing to this trend. It is notable that while the share of units sold to total supply of apartments increased at a higher rate in periphery in Chennai than the core, the share of periphery to total units sold dropped marginally from 2011-19, as seen in the figure below. In case of all other cities, the share of units sold in the periphery to total sales in the city has gone up over time.
To summarize, while private residential real estate development has been spatially expanding in all the eight metropolitan areas, there are significant variations in size, pricing and sales across the cores and peripheries of these cities. The cores and peripheries are evidently catering to differing real estate demand for various segments of the population, which will be investigated in the next series of data tales.