Real estate in the city continued to grow at an average of two percent in the last quarter. Once the slow progressing metro project takes off in earnest, capital value growth is likely to reach its true potential.
Map 1: Average Price Movements for Different Zones in Kolkata
- East Kolkata witnessed maximum appreciation in capital values, an average of four per cent in the quarter ending September 2014, primarily due to the appreciation seen in Eastern Metropolitan (EM) Bypass.
- A close second to East Kolkata is South, that grew to the tune of two per cent in the same period. Localities that witnessed the highest surge in prices in this stretch include Joka, Garia and Picnic Garden. Together, they saw an average rise of 20 per cent in the Jul-Sep 2014 quarter.
- A look at the annual growth rates revealed that North Kolkata gained 11 per cent from Jul-Sep 2013 to 2014 followed by South Kolkata that grew by seven per cent in the same period.
- Interestingly, capital value growth in North Kolkata came to a grinding halt in the quarter ending September 2014 probably owing to high saturation and pressure on existing infrastructural facilities.
- EM Bypass, the economic lifeline of the city, has seen non-uniform growth with the eastern stretch growing vigorously, whereas the southern, stagnating primarily because of lack of modern amenities and fragmented growth.
- Dum Dum in North Kolkata clocked in the highest growth in capital values annually. It saw an appreciation of 30 per cent in the quarter ending September 2014 over the same quarter in 2013. In the Jul-Sep 2014 quarter, the locality had gone up by six per cent, somewhat continuing this positive trend. Proximity to airport, presence of affordable homes along with many options for senior citizens are factors that have played in its favor.
Top Performers in Kolkata (Residential Apartments)
Top Non-Performers in Kolkata (Residential Apartments)
- The September quarter also proved to be a turning point for many localities such as Jadavpur, VIP Road and Narendrapur that witnessed a big decline in quarterly capital rates after a very positive annual performance.
- Prices in these areas declined on an average of 13 per cent primarily due to congestion or decline in quality of infrastructure.
- Rental rates in North and East Kolkata dipped marginally by almost two per cent last year. In the South, rental rates went up by 9.5 per cent on an average with Jadavpur commanding a 31 per cent increase and Behala dipping by 21 per cent.
- The Airport area in North Kolkata commanded an increase in rentals by 22 per cent last year.
- Construction of the E M Bypass connecting several important areas with the IT hub of Salt Lake City
- Expansion of the Kolkata Metro network to span the North-South and East-West zones
- Further development of the industrial-cum-intellectual hub of Kolkata Metropolitan Area
- Improvement of IT infrastructure in East Kolkata
- E M Bypass (Kolkata East) saw a capital value appreciation to the tune of 34 per cent in the quarter ending September 2014. The Bypass spans 21 km, starting from Ultadanga in the north, running across the north-eastern periphery of Bidhannagar and going on to the southern locality of Kamalgazi. The entire stretch has several connecting roads which link the Bypass with some of the prime hubs of the city via connectors.
- Nager Bazar and Keshtopur witnessed a jump of 13 per cent and 10 per cent respectively in the quarter ending September. Although these localities are relatively saturated, there have been improvements in public infrastructure that have eased the high levels of congestion here.
- Capital prices in Lake Town, a planned township, replete with lakes and parks, increased by 6 per cent in the September quarter. The recent announcement of the extension of Kolkata monorail from Ultadanga to Rajarhat has left a positive impact on prices. The town also happens to be situated within a distance of 7.6 km from the Airport.
“Upcoming projects in EM Bypass and Rajarhat in the East are impacting price movement. Southern region localities are riding the Metro wave.”
- The very affordable Dum Dum witnessed a price hike of six per cent in the quarter ending September 2014, continuing its year long rally. In addition to its proximity to the airport, the area has recently developed into a commercial centre, housing the Ordnance Factory Dum Dum (OFDC), which manufactures armaments for the Indian Armed Forces.
- Tables turned for residential property rates on VIP Road and Belgharia. The former saw a negative price movement of 17 per cent in the Jul-Sep 2014 quarter in contrast with the 22 per cent surge in the last one year. This is probably owing to an oversupply situation concurring with weak demand.
- In Belgharia, on the other hand, prices plateaued after a 36 per cent increase last year. This suburban area neither has substantial land parcels nor do the properties have modern amenities. It has a small number of G+4 buildings for which demand is yet to pick up.
- Property prices in Santoshpur too declined by seven per cent in the second quarter of 2014 after witnessing an annual increase of 13 per cent last year owing to demand-supply mismatch. There was lack of any new development.
- Sodepur continued its decline in capital values. Price correction in Godrej Prakriti, a big residential project in this area has also played a role in the overall price dip.
|LOCALITY||APR - JUN'14||JUL - SEP '14||% CHANGE|
|B T Road||3650||3650||0%|
|City Centre 2||4350||4400||1%|
|Dum Dum Cantt.||2500||2650||6%|
|E M Bypass||4850||6500||34%|
|LOCALITY||JUL - SEP '13||JUL - SEP '14||% CHANGE|
|City Centre 2||12||13||8.33%|
|Sector II - Salt Lake||16||16||0.00%|
|E M Bypass||20||18||-10.00%|
* Values represent average capital and rental per sq ft ratesKolkata South
- South Kolkata saw an average increase of 2 per cent in the last two quarters as compared to an average increase of seven per cent last year.
- Prices of properties in Joka increased by 29 per cent, on account of improved connectivity owing to the North-South metro, which starts from Diamond Park to reach Mahakaran via Joka. Although the area has a few residential projects, huge parcels of land are available and land acquisition prices are low.
- In Garia, residential prices increased by 17 per cent probably riding on strong demand from an influx of new buyers that are signing up for a host of new residential projects that have been recently announced. Demand is high in the Middle Income Group (MIG) homes ranging from Rs 30 lakh to Rs 40 lakh.
- Capital prices on E M Bypass stretch in this southern part of Kolkata have remained stagnant between the last two quarters at Rs 4,550 per sq ft. This stretch of the Bypass does not house land parcels big enough to conceive even mid-sized complexes. Most of the projects around the area are being constructed in Mukundapur (prices remained stagnant here too) and Nayabad (this area saw five per cent growth in the quarter ending September). Construction overall, is on small fragments of land, mostly comprising G+4 standalone buildings. Usually, these properties are available at Rs 3,000-Rs 4,000 per sq ft and lack modern amenities. The rate of appreciation is slow since demand for these properties have gone down with increase in price range starting from Rs 60 lakh for a 3BHK standalone unit.
- Narendrapur saw a decrease of six per cent this quarter after an annual rise of six per cent last year owing to certain controversies regarding ground water.
|LOCALITY||APR - JUN'14||JUL - SEP'14||% CHANGE|
|E M Bypass||4,550||4,550||0.00%|
|E M Bypass Extension||3,500||3,550||1.00%|
|Prince Anwar Shah Rd.||10,950||11,150||2.00%|
|Prince Anwar Shah Road Connector||4,800||4,800||0.00%|
|R B Connector||4,850||5,000||3.00%|
|LOCALITY||JUL - SEP '13||JUL - SEP '14||% CHANGE|
* Values represent average capital and rental per sq ft rates