Kolkata: At a time when the real estate sector in major cities across the country are struggling with flagging sales and launches, Kolkata is bucking the trend.
Kolkata witnessed a 19% increase in the sale of homes from January to September in 2019 over the same period last year, stated a study by a leading real estate research firm, JLL. The city, in fact, is now ahead of Bengaluru (zero growth), Chennai (2%) and Pune (a drop of 6%) in terms of growth, only behind Mumbai and NCR, which witnessed a rise in home sale by 23% and 28% respectively.
The inventory—units on offer—level in Pune and Chennai is same as that of Kolkata, though the absolute number for Bengaluru is more. The total number of inventories in Kolkata between January and September was 29,468, compared to 32,375 in Chennai, 29,582 in Pune and 23,172 in Hyderabad.
JLL pointed out that the south peripheral sub-market (Tollygunge, Narendrapur, Joka) has accounted for the majority of the sales, followed by east (Rajarhat, New Town) and north (Ultadanga, Dum Dum). “Tollygunge is a well-developed residential market with excellent connectivity through AJC Bose road, Old Ballygunge Road and the Metro network. Along with the top-notch physical and civic infrastructure, the locality boasts of public parks, educational institutes and hospitals as well,” the report states. The affordable and mid-priced housing segments account for more than 50% of the total launches in the first nine months of 2019. The majority of the launches in this segment were concentrated in the south peripheral market.
According to the study, there’s also a good demand for luxury houses, measuring up to 7,000 sq ft in areas, such as in New Alipore and Golf Garden (around South City Mall) from NRIs, HNIs and the film fraternity. “For northern and eastern peripheral submarkets, factors such as access to IT parks, easy connectivity to the airport and social infrastructure are driving up the demand. Projects, like Merlin Urvan at Nagerbazar, also contributed to the growth in north,” it added.
Credai National president elect H V Patodia agreed that there had been a positive growth in affordable segment here. However, he pointed out, the sale base went down last year due to introduction of HIRA and GST in real estate. “The market is now coming back to positive,” he added.
Samantak Das, chief economist JLL, said after a few years, the property market in Kolkata was now doing well. “There has been some positive impact of IT and ITes policy of state government as lot of Bengalis from outside have bought house here for future return. But this would be even better if HIRA is substituted by a policy, like RERA,” he added.
Merlin Group chairman Sushil Mohta also agreed with the growth picture but pointed out that prices had not increased than that in last year. “There has been an increase in cost due to non-availability of input tax credit and other regulations. There will be an upward revision in price from February to March,” he added.
Siddha Group MD Sanjay Jain pointed out that Kolkata had indeed been witnessing better growth in real estate sales compared to other major cities in the past year. “The fast progress in infrastructure development and connectivity from the fringes of the city have led to a spurt of demand in the affordable housing sector,” he added.
JLL said the city has adopted a restrained approach on the back of existing unsold inventory and weak demand. Kolkata developers have been selling off its already-launched projects and focusing on completion of construction, rather than new supply.