21 October 2016

Vox Populi – From Balconé to Cucina

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In the new wave of launches, developers have catered to demand by reducing the sizes of apartments, rather than the per square foot rate. This shrinkage in size has led to fewer apartments in the freehold space having a fully closed kitchen as developers optimize the carpet area.

Across communities, there is a premium that is embedded into dwellings when the balcony and/or garden is added. Whilst this is intuitive, it is interesting to note that the premium as a percentage increases when up market communities are looked at. This implies that at the top end of the market, margins for developers are maximized by adding “unlivable” and therefore more economically constructed BUA.

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We opine that as developers become more sensitive to the needs of the end user, the shape of the supply curve will continue to evolve, adjusting to the mid-market space. Whilst this implies lower margins, developers with sound financial footing will be able to address the current shortage in the marketplace.

To read the full report click here

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