The growing preference for larger living spaces among Hyderabad homebuyers over the past decade appears to have declined significantly within a year.
For the first time in six years, Hyderabad’s real estate market is witnessing a notable decline in the demand for larger homes. Between 2023 and 2024, the city experienced a 9% reduction in average flat sizes, decreasing from 2,299 square feet to 2,103 square feet. This shift contrasts with the previous trend from 2019 to 2023, where average flat sizes increased by 24%, rising from 1,700 square feet to 2,103 square feet.
Despite a notable increase in housing prices across cities in 2024, homebuyers nationwide continue to seek larger living spaces. According to Anarock data, the average flat size in the top seven cities grew by 8% in 2024, rising from 1,420 sq. ft. in 2023 to 1,540 sq. ft. in 2024.
Factors Contributing to the Shift
Several elements have influenced this change in buyer preferences:
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Affordability Concerns: The surge in property prices has made larger homes less accessible to a broader segment of buyers. In the first half of 2025, the average price of houses in Hyderabad rose by 37%, escalating from ₹84 lakhs in 2024 to ₹1.15 crores in 2025.
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Economic Uncertainty: A 42% decline in house sales indicates a cautious approach among buyers, possibly due to economic uncertainties and recent market fluctuations.
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Evolving Preferences: There is a growing inclination towards mid-sized homes that balance space and affordability, catering to both premium and mid-income buyers. Properties sized between 1,000 and 2,000 square feet accounted for 69% of all registrations, highlighting this trend.
Implications for the Real Estate Market
This shift has several implications:
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Developer Strategies: Builders may need to adjust their projects to focus on mid-sized units that align with current market demand.
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Market Dynamics: A sustained preference for smaller homes could influence property prices and the overall supply-demand equilibrium in Hyderabad’s real estate sector.
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Investment Trends: Investors might recalibrate their strategies, considering the changing buyer inclinations towards more affordable housing options.
In 2024, the average flat sizes in the southern cities of Chennai and Bengaluru measured 1,445 sq. ft. and 1,660 sq. ft., respectively.
In conclusion, Hyderabad’s real estate market is undergoing a significant transformation, with a discernible move away from larger homes. Understanding and adapting to these evolving buyer preferences will be crucial for stakeholders aiming to navigate the city’s dynamic property landscape effectively.
