Centre urges State to adopt RERA Disapproving the diluted norms under Housing Industry Regulation Act (HIRA), the Centre and a people’s forum urged the West Bengal government to adopt RERA in its true spirit. The State remains the last one, after Jammu and Kashmir, to have implemented the operations of a regulatory body across the country, marring buyer sentiment significantly.
Civic body allows mixed land use in New Town
After Salt Lake, properties in New Town have also been permitted to utilise the ground floors for commercial use by paying a nominal fee. It will lead to a revision of the property tax as per the Unit Area Assessment (UAA) system. In another move, New Town was also recognised by the India Green Building Council (IGBC) as a ‘Green City’, owing to the relentless efforts towards minimising environmental degradation.
Property tax penalty spikes by 10 percent
Apart from extending the deadline of paying property tax by a month, the New Town Kolkata Development Authority (NKDA) also raised the penalty on non-payment of taxes to 30 percent, an increase of 10 percent for defaulters.
Phoolbagan intersection opens after six years
Despite several roadblocks, the Phoolbagan intersection was opened for use after six years. The Phoolbagan-CIT Road-Narkeldanga crossing had been closed to facilitate construction of the East-West metro’s underground station. The opening of the intersection and the East-West metro route are anticipated to make the locale more habitable in the upcoming quarters.
The capital and the rental markets of Kolkata remained largely stable recording insignificant upsurge quarter-on-quarter. The city also witnessed a dip in fresh supply of housing inventory. While a total of around 2,500 new units were launched in
Apr-Jun 2018, the number fell drastically in Jul-Sep 2018. Uncertainties pertaining to West Bengal HIRA kept realtors and buyers baffled. The buying sentiment, unquestionably, remained muted. Noticeably, one of the prime regulations under the Act refrains developers and agents to sell unregistered projects. The move discouraged developers from launching new projects across budget categories. About 50 projects are registered under HIRA till now, but it may take a few months to see traction in the realty market.
The collapse of the Majerhat Bridge, which connects Central Kolkata to South Kolkata, added up to the delay in project launches. Buyers, too, have adopted a cautious stance amidst the confusion. Both property enquiries and sales volume maintained status-quo, this quarter.
The successful trial run of the 3 km-long stretch of the East-West metro route, which is anticipated to be launched in December 2018, came as a soother to the otherwise low-key market sentiment. While the ongoing festive season may bring real estate activities to a halt, the metro may spur growth in the sector by the end of the next quarter. Enhanced clarity on the implementation of HIRA will also play a vital role in giving a fillip to the market in the ensuing quarters.
Real estate stakeholders remained uncertain about property investments in Kolkata throughout the quarter, courtesy the confusion surrounding WBHIRA and the adoption of the central RERA rules. New launches subsequently suffered and wiped out the possibility of any noteworthy hike in property values. The realty sentiment further worsened with the collapse of the Majerhat Bridge, a connecting link between the cental and the southern parts of Kolkata.
The Jul-Sep 2018 quarter did not report any change in the demand for residential apartments in Kolkata. However, there was a noticeable decline in the supply of under-construction units, primarily owing to the withdrawal of property advertisements in the absence of HIRA registration.
While affordable housing continued to dominate the demand curve, a 30 percent gap in supply marred the buying sentiment. Availability of homes priced within Rs 25 lakh stood at 18 percent, four percent lower than the previous quarter.
The collapse of the Majerhat Bridge put the realty landscape of neighbouring localities such as Joka, Dayal Bagh, Thakurpukur and Bara Nagar on a backburner. Property prices in these locales are anticipated to suffer in the ensuing quarters, too. A few locations, including Alipore, Thakurpukur, Sakher Bazar, falling within 7 km radius of the bridge, have already witnessed price corrections to the tune of three percent.
Overall, the average weighted capital prices in Kolkata improved by a negligible one percent. Few localities in North and South Kolkata such as Lake Gardens, Lake Town, Brahmapur, Baguihati, Beliaghata, Agarpara, Kankurgachi, Tollygunge, Narendrapur, Sonarpur registered an uptick of three percent each, QoQ. Some localities which failed to register any growth in the same zones are Bhawanipur, Ballygunge, Netaji Nagar and Thakurpukur. Capital rates in these areas dipped by a noticeable four percent, each, QoQ.
The soon-to-be commenced East-West metro route propelled property rates in connected locales such as Barrackpore and Dum Dum by 1-2 percent, each, QoQ. Salt Lake, the locality where the metro route terminates, is yet to see any impact of improved connectivity.
Amidst cautious buying sentiment, the rental market benefitted and registered a growth of three percent between Jul-Sep 2018 and the same quarter last year. The rental graph of posh localities such as Nakatala, Narendrapur and Salt Lake scored a whopping nine percent increase in rental values, YoY.
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