SC approves petition against WBHIRA
Defying the Centre’s advice to adopt RERA, the West Bengal government has proceeded with launching the e-portal of its version of RERA - West Bengal Housing Industry Regulation Act (WBHIRA). About 111 real estate projects have been registered under WBHIRA. The petition filed by the people’ forum, challenging its constitutional validity, has been accepted by the Supreme Court. The State is yet to respond on the matter.
Metro projects in the pipeline
Awaiting the final nod, the East-West metro may start operations between Salt Lake Sector V and Stadium by April-end. In addition, a metro rail corridor connecting Noapara and Dakshineswar will become operational by February 2020, bolstering the connectivity quotient of housing hubs of North 24 Parganas, Howrah and Hooghly.
Tollygunge–Jadavpur stretch to get filtered water supply
The civic body has adopted a water augmentation scheme to provide safe drinking water to every household dependent on groundwater in Kolkata. The scheme is anticipated to fillip the liveability index of the locales, including Tollygunge–Jadavpur stretch and the areas around EM Bypass, by providing uninterrupted filtered water supply.
New Maa Flyover ramp opens to the public
The connectivity between East and South Kolkata has improved with the inauguration of the west-bound ramp connecting the new Maa flyover to AJC Bose Road. The one km-long stretch will not only decongest traffic at the Park Circus seven-point crossing but also reduce the travelling time to half from Science City towards Race Course, providing relief to daily commuters.
With sales volume at an all-time low, Kolkata’s realty displayed no signs of revival in the first quarter of 2019. Ambiguity pertaining to revision in GST rates on under-construction units kept the market on tenterhooks. Property prices maintained status quo, albeit average rental values recorded an upsurge of two percent this quarter over the same quarter previous year.
The continuing tension between the people’s forum and the State over the adoption of WBHIRA over RERA coupled with the liquidity crisis due to locking up of
70 percent of project funds in escrow account forced builders to curtail new launches. Noticeably, negligible sales in Q1 2019 led the Quarters-to-Sell (QTS) climb up to 12.6 from 12.1 with an inventory overhang of over 40,000 housing units.
With almost half of the housing inventory priced under Rs 40 lakh, homebuyers rejoiced the decision of one percent GST on affordable under-construction units. Builders, on the other hand, refrained from advertising their projects and are re-evaluating unit cost to compensate for the exclusion of Input Tax Credit (ITC) benefits. This might eventually inflate the overall cost of owning a house and hurt demand for under-construction units.
Deterrents such as the delay in metro construction, higher office space vacancy rate and on-going repair work of Majerhat Bridge hurt buyer sentiment and put property prices across the city under pressure. Realty stakeholders eagerly await clarity over GST and WBHIRA’s acceptance, in the absence of which, the city’s residential market continues to suffer.
Kolkata’s real estate market had a quiet start to 2019 with tepid sales volume, limited number of new launches and a tense regulatory environment due to the adoption of WBHIRA instead of RERA. While the revision in GST rates initially cheered the market, the news of exclusion of ITC benefits created an ambience of uncertainty and confusion. Average property values maintained status quo in Jan-Mar 2019, while the rental market strengthened by two percent, YoY.
The City of Joy witnessed no residential project launches in Jan-Mar 2019 with end-user sentiment remaining crouched this quarter, too. A few popular locales including Rajarhat, New Town and the areas in South Kolkata continued to dominate the property charts, accounting for nearly 70 percent of the sale queries.
While nearly 75 percent of the housing demand in the city lies within the Rs 50 lakh bracket, an unmet supply of almost 25 percent marred buying sentiment. The luxury and ultra-luxury segments, i.e. homes priced above Rs 60 lakh kept vying for buyers. Amid meagre uptake, the categories witnessed an oversupply of nearly 20 percent.
Excess stock of premium housing inventory kept average price growth under check. Defying all odds, Maheshtala topped the popularity charts witnessing a four percent increase in property rates, QoQ. Rental ‘asks’ here grew by eight percent in Jan-Mar 2019 as against Jan-Mar 2018. The recent opening of Taratala flyover acted as a growth stimulator for the realty landscape in Maheshtala.
Some other real estate hotspots, including Uttarpara, Beliaghata, Kaikhali, Tagore Park and Sakher Bazar, recorded a four percent hike in property ‘asks’, each, in Jan-Mar 2019 vis-à-vis Oct-Dec 2018. On the contrary, the residential pockets such as Action Area II, Mukundapur, Jadavpur, Narayanpur and Sodepur saw average capital values declining by three percent, QoQ – the highest in the city.
The rental market in Kolkata clocked a two percent hike in the average ‘asks’, YoY. Kaikhali aced with a nine percent hike in the average rental ‘asks’ on account of fresh inventory and improving connectivity. Residential pockets of South Kolkata such as Mukundapur, Maheshtala, Lake Gardens, Patuli and Santoshpur witnessed 7-8 percent hike in ‘asks’, each, YoY.
Kolkata’s office leasing segment continues to suffer from lack of absorption as available area has grown from 3.2 million sq ft to 4 million sq ft. The inventory surplus has started impacting the rental market in both residential and commercial landscape, especially in localities near the IT hub such as Salt Lake Sector V, Rajarhat and New Town.
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