MUMBAI – Property buyers in Mumbai will be in for a more transparent deal when it comes to purchasing an apartment. Mayfair Housing, a prominent builder developer in the western suburbs and also a large developer of road & reservation TDR in Mumbai, have decided to price their new projects on the carpet area and not super built up as has been the current market practice.

The new pricing would take effect at their following new projects: the integrated Residential cum commercial complex Mayfair Virar Gardens at Virar West; the twin towers Mayfair Symphony Springs & Mayfair Sonata Greens at Vikhroli West and Mayfair Meridian a large premium residential cum commercial complex at Andheri West.

While the new pricing strategy will not bring down prices, buyers would be aware of the actual approved area they are paying for i.e. the carpet area that they actually get to use as per the Municipal approvals.

The announcement comes after the HDFC Chairman Deepak Parekh has gone public on several occasions, saying that real estate developers should price their products on carpet area basis.

Mr Parekh had said while addressing a builders’ forum at Kolkata that HDFC was even willing to finance construction at a concessional rate of interest if the builders sell apartments on the basis of carpet area.

“We can lower our finance rate by 50 basis points if the builders are ready to sell flats on the basis of carpet area and not on super built-up area,” Chairman Deepak Parekh had said at a session organised by the Bharat Chamber of Commerce.

Mr Nayan Shah, Managing Director of Mayfair Housing said there is confusion in the housing industry over the concept of ‘area’. “There could be as much as 40-50 per cent difference between the super built-up and carpet areas. A universal concept of selling flats on the basis of carpet area would bring about transparency and accountability in the housing industry,” he said.

The super built-up area includes the carpet and built-up area of the apartment and its proportionate share in the common spaces of the building, like lobby, staircase and elevator.
The built-up area includes not just the carpet area but also that being occupied by the walls of your home. The carpet area is literally defined as the exact area within the walls of your home.
The confusion arises because the definition of the super built-up area is left to the discretion of the builders. Some may even include the terrace, security room, electrical room pump room and the club house etc. The total area of these ‘extras’ is taken into account and divided by the number of apartments in proportion of their sizes and loaded on to the actual carpet area.

This discretion started with a justification of the calculation of the actual loading but has now evolved to arbitrary notional loading of up to 50%. Therefore, if you are given a quote for a 1,000-sq-ft apartment and the area referred to is the carpet area, you have a huge living space. If it is built-up area, you have lesser space and in case of a super built-up area, you compromise heavily on the living space. In fact, the actual carpet area may just work out to be around 666.66 sq ft.

Carpet area pricing will therefore bring in transparency in real estate and pave the way for the introduction of best practices in line with international norms and standards of dealing.