Expansion of Kolkata Metro brings cheer
The announcement of Salt Lake Sector V-Stadium metro corridor becoming operational from October 2018 has set certain residential pockets – Barrabazar, Esplanade, Joka, Barasat – abuzz. Further, the city’s realty market revelled at the proposed addition of 50 km to the existing East-West metro network.
New tax system in Kolkata to incentivise buyers
After much ado, Kolkata Municipal Corporation (KMC) finalised the Unit Area Assessment (UAA) tax system, while taking adequate measures to educate payers. The move is expected to ease processes, boding well with new and existing buyers.
Affordable township projects to uplift Kolkata’s realty
Kolkata West is set to witness the launch of three large township projects between 2018 and 2022 by renowned developers such as Alcove Realty, Shriram Properties and Shapoorji Pallonji. Housing a cumulative inventory of over 5,000 homes, the projects are anticipated to bolster realty sentiment in a big way.
HIRA ensures builder compliance
Despite the government maintaining silence on Housing Industry Regulatory Authority (HIRA), post its notification, the move has served to ensure builder compliance and introduce freebies in the market, in a bid to propel sales.
Premium projects to offer a fillip to city’s luxury housing segment
Big ticket projects, such as the Trump Tower, are anticipated to awaken the luxury segment of the city, which has been testimony to softening price trends due to demand crunch in the last few quarters.
A nearly-static 2017 made way to a more positive and hope-filled 2018, with buyers and investors exhibiting renewed interest in Kolkata’s real estate. As anticipated, metro expansion acted as the prime growth catalyst. Construction of new roadways and bridges, and buttressing of the existing ones, also served to reduce traffic gluts in key residential hubs, improving sentiment. Further, Jan-Mar 2018 witnessed some price consolidation in the affordable category, with the launch of several projects touted to feature world class amenities.
In the ensuing quarters of 2018, the West Bengal government is anticipated to take a firm pro-transparency stance and implement the much-awaited Housing Industry Regulatory Authority (HIRA). An increase in accountability may lead small firms to shut shops, resulting in a consolidation of realty businesses. Innovative payment plans and new freebies might make the rounds with builders seeking to offload Kolkata’s nearly three-year old inventory. Further, new launches would continue to remain restricted as developers would focus on seeking compliance with HIRA and completing projects within promised timelines.
While fence-sitters were not motivated to loosen their purse strings in Jan-Mar 2018, establishment of a regulatory authority under HIRA can offer a massive fillip to sentiment. The property sales graph might not effectively look upward in the next two quarters, however, by 2018- end, a progression in the sales volume and capital prices seems to be on the cards.
Kolkata welcomed Jan-Mar 2018 on a hopeful note, with several key connectivity projects reinforcing realty sentiment. The drafting of HIRA in the preceding quarter propelled the developer fraternity to seek compliance, infusing confidence amongst fence-sitting buyers. Although sales volume is yet to see an incremental growth, property values marked stability in Jan-Mar 2018 vis-à-vis Oct-Dec 2017.
- The central, East and West zones posted 1-2 percent capital growth in Jan-Mar 2018. The upcoming ultra-luxury development – Trump Tower – and township projects by Alcove Realty, Shriram Properties and Shapoorji Pallonji – played a significant role in boosting prices points in Uttarpara, Howrah and Hooghly.
- North Kolkata witnessed a slight dip in property values, despite the launch of several new projects in Madhyamgram and enhancement of road infrastructure. Prices in the southern zone maintained status quo notwithstanding civic enhancements.
- Netaji Nagar, Jadavpur and Sonarpur saw a three percent uptick in average capital values, each, QoQ. While construction of roads and bridges proved to be a growth driver for Jadavpur; the other two pockets boasted of new launches in the last two months.
- IT/ITeS activity, expansion of East-West metro connectivity, proximity to airport and improvement of existing roadways worked in favour of New Town and Rajarhat. The localities posted an increase of 1-3 percent in home values, each, QoQ.
- Action Area I in New Town, remained feisty, recording an upswing of three percent in average weighted capital ‘asks’. Launch of new projects in the quarter gave a thrust to property prices.
- Behala saw a declining capital graph in Jan-Mar 2018 vis-à-vis Oct-Dec 2017. While price correction has been underway in several pockets of the city, Behala’s property market is anticipated to exhibit growth after the construction of the metro corridor in Joka.
- Kolkata’s rental graph has been heading north, unceasingly, since the last two quarters. The pattern recurred in Jan-Mar 2018 as well, reporting an insignificant growth on the charts, YoY. Not surprisingly, Action Area I led the race with a surge of 10 percent in ‘ask’ prices, YoY.
- An uptrend in rental rates in southern pockets such as Behala, Ballygunge, Naktala, Satoshpur was a result of lease renewals. Lake Gardens, however, scored a six percent increase on the back of sturdy civic facilities and presence of students and single professionals.
- Rents in Baguihati, Chinar Park and Kaikhali reported a rise of 4-5 percent in Jan-Mar 2018 vis-à-vis the March ending quarter in 2017 due to the availability of competitively-priced inventory.
Jan-Mar 2018 reported a sustained demand for ready homes from cautious buyers vis-à-vis under-construction units. The trend did not come as a surprise, especially with the implementation of Goods and Services Tax (GST) and ambiguity surrounding input tax credit. Full-fledged execution of HIRA and completion of over 1.5 lakh homes in 2018, as promised, might put the buyer and investor communities at ease, which currently continue to be in a watchful mode.
- While the preference for ready-to-move homes remained overwhelmingly high, encompassing over 80 percent of the total demand witnessed in Kolkata, Jan-Mar 2018 recorded an increased inclination towards under-construction properties, albeit marginally. Experts explained the trend as a penchant for low-priced properties.
- Notably, there has been a decline in the demand for homes priced within Rs 25 lakh. While the dip is anticipated to be temporary with Kolkata’s buyer community basing their purchase decision on unit cost of apartments, the launch of high income and luxury projects in the last five months might have triggered the change.
- None of the budget categories reported a demand-supply equilibrium. Only the mid-income (Rs 25-40 lakh) and luxury (Rs 60 lakh-Rs 1 crore) brackets came close to achieving a balance. Availability of homes in the affordable (below Rs 25 lakh) and high-income (Rs 40-60 lakh) ranges may match the preference exhibited, once the 1.5 lakh homes are handed over by the year-end.