Notification of WBHIRA causes disruption
West Bengal Housing Industry Regulation Act (WBHIRA) received flak in the wake of numerous deviations from the Centre’s RERA norms. WBHIRA dilutes the original law by relaxing clauses on unforeseen circumstances preventing developers from fulfilling contracts and redefining ‘garages’ as any parking space authorised by a government body.
New tax system bodes well with buyers
The new Unit Area Assessment (UAA) tax system launched in April 2018 has helped New Town Kolkata Development Authority collect Rs 1 crore, at the same time, easing tax payment for existing homeowners. This move has bolstered real estate sentiment, incentivising new homebuyers.
Metro continues to act as Kolkata’s lifeline
The connectivity quotient between Howrah and Kolkata is set to receive a fillip with the completion of India’s first underwater tunnel. Meanwhile, the residential pockets of Barasat, Joka and Esplanade continued to report a buoyant market in anticipation of Salt Lake Sector V-Stadium metro corridor.
Upcoming affordable projects make Kolkata real estate buyer-friendly
With the western zone boasting of an inventory of 5,000 reasonably-priced homes and developers finally offering discounts, soothsayers envisage a positive real estate story in the forthcoming quarters.
Kolkata’s real estate market perched on the threshold of a radical transformation, courtesy the WBHIRA. While the new law was notified in Oct-Dec 2017, implementation is still underway. Real estate stakeholders adopted a wait-and-watch approach, anticipating deviations from the central RERA norms.
To this end, sales volume remained muted, despite enquiries heading north for the third consecutive quarter. West Kolkata garnered maximum enquiries, riding the wave of upcoming affordable townships. These projects are priced as low as Rs 14 lakh, forming a perfect haven for potential buyers in a price-sensitive market.
The expanding metro network continued to act as a lifeline, especially with the shift in business districts from Central Kolkata to the suburbs. Price points are anticipated to surge in certain residential belts post the completion of the East-West metro corridor in October 2018. Areas in and around the belts of Topsia, Rashbehari Avenue, Kasba and Salt Lake Sector V are expected to be the principal beneficiaries.
While stakeholders and soothsayers predict a cheerful story for Kolkata in the near future, much of it will be incumbent on the smooth execution of the law, adoption of norms laid out in central RERA and quick establishment of a regulatory authority.
The city reported lowest unsold inventory levels at about 26,000 units in the beginning of the quarter. While enquiries and sales volume witnessed a marginal rise, price points maintained status quo in Kolkata, QoQ. While new launches dropped over the last quarter, developers upped their efforts towards completing the ongoing residential projects. The festive season is anticipated to witness a few deliveries and a subsequent surge in ‘ask’ prices.
Real estate values, across zones, either remained muted or posted a dip in Apr-Jun 2018, as compared to the preceding quarter.
Only 40 percent of the tracked localities could beat market blues, recording an average capital spike of 1-4 percent, QoQ. The frontrunners – Kharda and Dunlop – situated on the BT Road filed a buoyant market on the back of new launches and circulation of freebies.
A spill-over demand from Dunlop boosted capital rates in the neighbouring locality of Dakshineswar, which delineated a growth of three percent, QoQ. This resale hub also witnessed some price correction in the Apr-Jun 2018 quarter.
All the eastern localities, save Chinar Park, witnessed a downtrend in home values. Action Areas I, II and III faced the brunt of oversupply despite boasting of a more structured civic and road infrastructure.
An inventory overhang of roughly 6,000 units waylaid Rajarhat’s chances of marking an uptrend in property rates. Price points in the locale dropped by a margin of two percent, QoQ, despite a thriving office and commercial segment.
The price-competitive localities of Lake Garden and Thakurpukur posted a capital increment of four percent, each, in Apr-Jun 2018 vis-à-vis Jan-Mar 2018. In addition to being based in the posh south, proximity to Joka metro station catalysed realty sentiment in this belt.
Although average weighted property values in West Kolkata marked a two percent dip, QoQ, the zone has been witnessing traction from the buyer community. New project launches in the budget range of Rs 14-25 lakh is attributed to bringing the median price tag down.
The residential rental graph of Kolkata continued to tread the growth path, marking a marginal rise in Apr-Jun 2018 versus the same quarter in 2017. Jadavpur emerged as the frontrunner clocking a massive surge of nine percent, YoY, on the back of ambitious ‘asks’.
The otherwise nondescript locality of Madhyamgram showcased an annual rental growth of six percent. Availability of fresh inventory and architectural redevelopment of the old properties have worked in favour of the area.
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