The wrapper got bigger

Shrinkflation, as consumers have learned to recognise it, follows a simple script. The packet stays the same price, the contents quietly reduce, and somewhere a brand manager congratulates himself on a margin defended without a headline. It works because buyers anchor on price and rarely check the net weight.

Indian real estate has improved on the format considerably. Here the packet did not shrink. It grew. Advertised apartment sizes have risen sharply for six years, developers have been praised for responding to post-pandemic demand for space, and buyers have paid accordingly.

The contents, meanwhile, have gone almost nowhere.

This is possible because housing is sold in a unit of measurement that the seller is permitted to define. A biscuit manufacturer cannot redefine the gram. A developer can, more or less, redefine the square foot.

A square foot is not a measurement, it is a negotiating position

Three numbers describe every Indian apartment, and only one of them is a room.

Carpet area is the floor you can stand on: bedrooms, living room, kitchen, bathrooms. Built-up area adds the thickness of your walls and usually the balcony. Super built-up area, also marketed as saleable area, adds your proportionate share of everything held in common: the lobby, the lift shaft, the staircase, the corridor, the clubhouse, the gym, the swimming pool, the landscaped podium, the generator room and, in the more thorough calculations, the security guard's cabin.

The gap between the last number and the first is called loading, and it is expressed as a percentage. A flat sold as 1,400 square feet at 40 percent loading contains 1,000 square feet of floor. The other 400 exist, but you cannot put a bed in them.

Nothing about this is illegal, hidden or new. What is new is the direction of travel.

The arithmetic nobody runs

Anarock's research, widely reported in February 2026, found that average apartment sizes across India's top seven cities rose from about 1,420 square feet in 2023 to roughly 1,676 square feet in 2025, an increase of 17 percent in two years and about 45 percent since 2019. Delhi NCR led, with average sizes up 30 percent to around 2,466 square feet. This was reported, reasonably enough, as evidence that Indians are buying bigger homes.

Now take a second Anarock number, from the same firm. Dr Prashant Thakur has noted that a 30 percent loading factor used to be standard, and that 40 percent is now the norm. In Mumbai, only about 57 percent of the super built-up area a buyer pays for is carpet. Bengaluru and Delhi NCR sit near 41 percent loading.

Put the two together, using nothing more sophisticated than division.

A 1,420 square foot flat at 30 percent loading contains roughly 994 square feet of usable floor. A 1,676 square foot flat at 40 percent loading contains roughly 1,006. The advertised home grew by 17 percent. The home grew by about one percent.

This is a rough calculation, not a measured statistic, and loading varies enormously by project. But it is directionally the whole story, and it is arithmetic that the property pages have somehow not got around to performing. Buyers have been sold a larger number and charged for it. They have not been sold a larger flat.

RERA fixed the label and left the shelf alone

India did legislate here, and the legislation was serious. The Real Estate (Regulation and Development) Act of 2016 requires that carpet area be defined, disclosed and used as the basis of the agreement for sale. If the delivered carpet area falls short of what was agreed, beyond a small tolerance, the developer must refund the difference with interest. State portals publish project registration documents in which the carpet area appears.

What RERA does not do is cap the loading factor. It requires the number to be disclosed. It does not require the number to be reasonable.

The consequence is a market in which the contract speaks one language and the sales process speaks another. The agreement says carpet. The brochure, the hoarding, the site visit and the broker say saleable area, because a project priced at 8,000 rupees per square foot on the inflated denominator sounds cheaper than the identical project priced at 11,200 rupees on the honest one. The buyer signs a compliant document having made the decision on a non-compliant number.

Disclosure without a limit is a nutrition label with no ceiling on sugar. Useful, and not remotely the same thing as a rule.

Where the missing square feet went, architecturally speaking

The interesting part, for anyone who cares about buildings rather than only about balance sheets, is what loading does to design.

If a developer can charge for common area at the same rate per square foot as bedroom, then common area stops being an overhead and becomes a revenue line. Every double-height lobby, every clubhouse, every rooftop infinity pool, every landscaped amenity deck is billable surface. The amenity is not generosity. It is inventory.

This inverts the traditional discipline of residential design. An architect who once fought to minimise circulation space in favour of usable rooms is now working for a client with the opposite incentive. The rational response is precisely what Indian metros have built: towers with magnificent arrival lobbies and modest flats, gyms nobody has time for, and a "study" measuring six feet by six that appears in the brochure as a room.

The financial asymmetry deserves a moment of appreciation. In most cities, monthly maintenance is levied on super built-up area, so residents pay every month for their share of the pool. Municipal property tax, in many jurisdictions, is assessed on carpet area. The developer bills you on the big number. The state taxes you on the small one. Both parties have chosen the definition that suits them, which tells you the definitions were never technical to begin with.

Case study: Henderson Land, or what happens when nobody draws a floor

Hong Kong shows where this logic terminates if left alone, and it produced a case study in a very famous company.

Hong Kong sells homes by saleable area, which sounds more honest than the Indian convention and is not, because it includes balconies and utility platforms that developers received under floor area concessions. Research by the Liber Research Community found that nano flats built between 2010 and 2019 enjoyed an average of 23.6 square feet per unit of such concessions. Buyers were, in effect, paying full price for floor space the developer had been given for nothing.

The architecture followed the incentive. In 2012, the Buildings Department relaxed its guidelines to permit open kitchens without their own windows, a design borrowed from hotel rooms. Nano flats proliferated. Liber's study of the decade found an average nano flat size of 219 square feet, falling from 220 in 2010 to 213 by 2019, and that in 88 percent of them, cooking, living and sleeping occurred in a single room. Not one flat in their database managed both a separate bedroom and a separate kitchen.

Henderson Land Development, one of Hong Kong's largest developers, emerged as what the researchers termed the king of the format: 2,858 nano flats built solely by the company, plus 96 in partnership, against 624 built by New World Development, Cheung Kong and Sun Hung Kai Properties combined. The genre's landmark, the 128 square foot flat at T Plus in Tuen Mun, developed by Jiayuan International and Stan Group, was smaller than a standard car parking space and sold in 2019 for around HK$1.73 million, roughly HK$13,577 per square foot.

Note that price per square foot. The units were not cheap. They were small. Those are different achievements, and only one of them helps a buyer.

The sequence ended the way shrinkflation eventually ends in any market where the product becomes visibly absurd. In December 2021, the Hong Kong government imposed a minimum flat size of 26 square metres, about 280 square feet, on homes built on government land, later extended to railway and redevelopment projects. A government had to legislate a minimum size for a home, for the same reason regulators eventually specify a minimum net weight for a packet of biscuits: because the market had demonstrated it would not stop on its own.

The index cannot see any of this

There is a measurement problem hiding underneath, and it is the reason this matters beyond individual buyers feeling misled.

Housing inflation is tracked through price indices built on price per square foot. If the square foot in question is a saleable square foot, and loading has drifted from 30 percent to 40 percent over the same period, then the index is measuring the wrapper. Real housing inflation, expressed in the only unit that matters, which is rupees per square foot of floor you can actually occupy, has run meaningfully ahead of the reported figure.

Economists spent the 2010s learning to adjust consumer price indices for shrinkflation in packaged goods. Nobody has done the equivalent for the largest purchase most households will ever make.

One thing to do about it

Not vigilance, which is exhausting, and not litigation, which is slow. One number.

Before comparing any two projects, obtain the RERA-registered carpet area and divide the total price by that figure, never by the saleable area in the brochure. Every project then becomes comparable on the only basis that has physical meaning, and the developer with the 45 percent loading factor and the spectacular lobby stops looking cheap, because he never was.

The chocolate bar at least has the courtesy to be visibly thinner. Real estate has arranged matters so that the buyer, standing in a slightly cramped bedroom in a flat described as enormous, cannot quite work out where the missing space went. It went into the lobby. He is standing in it every morning on the way out, and he paid full price for the privilege.

Gauri Agarwal

Articles by Gauri Agarwal

How to Sell 400 Square Feet of Nothing