Kolkata residential market continues to be sluggish in the absence of a strong service sector

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Knight Frank India has launched the seventh edition of its flagship half yearly report – India Real Estate. The report presents a comprehensive analysis of the residential market performance of Kolkata for the period January-June 2017 (H1 2017).

Key takeaways:  

  • Kolkata residential market remained subdued in H1 2017 with 18% decline in new launches compared to the same period in 2016; Sales volume underwent a steeper fall with 22% decline during the same period.

 

  • On a half yearly basis, H1 2017 saw a slight improvement of 7% in terms of new launches while sales saw an increase of 11% compared to H2 2016.

 

  • The weighted average price remained stagnant in H1 2016, depicting the fact that the market is almost at a standstill, owing to the decrease in new launches and sales, waiting for clarity on factors such as RERA compliance and GST, amongst others.

 

  • Rajarhat emerged as the region with the highest number of residential units launched in H1 2017, accounting for 36% share of the total number of new launches.

 

  • South Kolkata, with one-third of the total sales volume, edged past Rajarhat for the first time in the recent past.

 

  • Significantly, 87% of the new launches announced in H1 2017 were in the ‘below INR 50 lakh’ ticket size category

 

  • Most of the new launches have been taking place in peripheral locations of the city with promise of infrastructure development in the near future.

 

  • Locations such as Baruipur, Narendrapur and Garia in the South and BT Road, Barrackpore in the North are observing increased buyer and developer interest

                                      

Kolkata Residential market trend:

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Source: Knight Frank Research

Speaking about the findings, Dr. Samantak Das, Chief Economist & National Director – Research, Knight Frank India said, “Kolkata residential market has been witnessing a tightening of new launches in recent years. It saw the numbers dip substantially by 18% in H1 2017, compared on an annual basis, although there was a slight improvement observed over H2 2016. Sales volumes also observed an increase of 11% in H1 2017 over H2 2016, but recorded a substantial 22% decline as compared to H1 2016. Rajarhat emerged once again as the region with the highest number of residential units launched in Kolkata. Although there was a decrease in its share compared to H1 2016 and H2 2016, Rajarhat is expected to maintain its momentum in the forthcoming years with new office developments, well-planned roads, proposed metro connectivity and proximity to the airport. Significantly, with 33% share in sales, South Kolkata has edged past Rajarhat for the first time, the primary reason being affordable and mid-end housing projects in locations like Baruipur, Narendrapur and Garia.”

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