- Residential market in Kolkata continues to remain under pressure, recording no capital growth in Apr-Jun 2016, against the previous quarter.
- Some pockets that gained due to the presence of IT/ITeS companies included Dum Dum and VIP Road in North; and Rajarhat in East Kolkata. Values in these belts surged by 7-10 percent Q-o-Q.
- New residential projects and improving connectivity gave a thrust to the housing demand in Naktala, where prices went north by a whopping seven percent.
- The plummeting trend of project launches continued plaguing the real estate market in Kolkata. The rate of fall in new launches is much more than that of absorption, indicating that the residential market is striving for an equilibrium in the forthcoming quarters.
- The rental landscape of Kolkata narrated a relatively happier story in Apr-Jun 2016 as compared to the capital market, clinching a yearly growth of two percent. This is despite the low rate of migrating population in the city.
- With the rising trend of nuclear families, areas housing 1BHK and 2BHK units – Kalikapur, Kestopur, Narendrapur – witnessed maximum transactions.
- Development of a sustainable model for supply of drinking water in Kalikapur has increased the attractiveness index of the location, accounting for the 12 percent rise in rental rates Y-o-Y.
- Demand for homes on rent slumped in areas such as Salt Lake and VIP Road, which house bigger units. However, Rajarhat was the only exception that witnessed a jump of eight percent Y-o-Y.
Demand and Supply Analysis
Demand-supply mismatch continues to blight Kolkata’s real estate story in Apr-Jun 2016, in all property types, save builder floors. The first half of 2016 witnessed a slew of mid-end and affordable housing projects in the peripheral locations of the city.
- Society apartments captured three fourth of the market’s demand and supply. While supply continued to exceed demand in Apr-Jun 2016, as compared to Jan-Mar 2016, the gap between the quadrants increased Q-o-Q, in keeping with the general line of inactivity in the realty sphere.
- Builder floor is the only property type where demand and supply were a perfect match, despite bagging nearly eight percent of the total market share.
- Demand for independent houses/ villas in Kolkata exceeded supply by a significant margin, with maximum availability of this property type in the western zone of the city.
- More than half of the city’s housing market was captured by properties in the affordable (within Rs 25 lakh) and mid-income (Rs 25-40 lakh) brackets, cumulatively.
- While the demand-supply graph converged in the case of mid-income housing segment, the demand for affordable properties far surpassed its supply in the city. This is despite a number of affordable housing projects launched in H1 2016.
- The North and South zones of Kolkata housed almost 40 percent of the total share of affordable housing units.
- South Kolkata harboured a robust share of both mid-income and high-income housing projects.
- While 2BHK has remained the most popular configuration in Kolkata, 3BHK units also fared equally popular in AprJun 2016, vis-à-vis Jan-Mar 2016. Over 45 percent of the market comprised 2BHK units. Properties configured as 3BHK made up another 40 percent of the overall realty landscape.
- Kolkata faced a supply crunch of 2BHK houses. While buyers are on the lookout for lower ticket configurations, supply of these units coninued to on a meeker side.
- Units configured as 4BHK were the least in demand and its supply was equally feeble; however, the 1BHK category witnessed the lowest supply among all the four formats.
- The supply of 3BHK and 4BHK units in the city far overrode its demand.
- Given the bleak realty scenario, where delayed project deliveries are rampant, it was not surprising to see a demand of over 82 percent for ready units in the current quarter, while supply was merely 68 percent.
- Replicating last quarter’s trend, South Kolkata contributed to around 45 percent of the total ready-to-movein inventory.
- While the southern zone witnessed the maximum launches in Apr-Jun 2016, the number of project launches increased by 5-7 percent in East and North Kolkata.
- Overall, negligible movement was noted in the demand and supply of units across zones, thereby indicating a sluggish market.