Kolkata residential market continues to be sluggish with decline in sales & new launches: Knight Frank India

Knight Frank India today launched the sixth 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 July-December 2016 (H2 2016).
Key takeaways:
Kolkata residential market remains subdued with 8% decline in new launches in 2016
compared to 2015; sales volumes undergo a steeper fall with 14% decline Y-O-Y
On a half yearly basis, the decline in new launches in H2 2016 was 15% while sales
saw a dip of 20%, as compared to H2 2015
The weighted average price remains stagnant in H2 2016, depicting the fact that the
market is almost at a standstill, despite the decrease in new launches and sales
Rajarhat emerges as the region with the highest number of residential units launched
in H2 2016, accounting for 40% share of the total number of new launches. In terms
of sales volume, it accounts for 35% share of the total sales in H2 2016
South Kolkata accounts for 34% of both new launches and sales in H2 2016 as
compared to 27% share of total launches and 25% share of sales in H2 2015
North Kolkata sees a reduction in new launches and sales at 15% and 18% in H2 2016
as compared to 20% and 21% respectively in H2 2015
East Kolkata comprising locations such as Salt Lake and Kankurgachi sees new
launches remains almost constant at 10%; sales increase to 11% in H2 2016 from 7%
in H2 2015
Dr. Samantak Das, Chief Economist & National Director –  Research, Knight Frank India said, Kolkata residential market had remained relatively stable  in H1 2016 on Y-O-Y basis, with expectations of improvement in H2 2016.However, the demonetisation announcement changed the market scenario in Q4 2016 and led developers and buyers to refrain from making any property related decisions. The decline in sales volume was primarily brought about in the second half of the year post this announcement. On a half yearly basis, the decline in new launches in H2 2016 was 15% while sales saw a dip of 20%, as compared to H2 2015. In terms of micro markets, we expect Rajarhat to maintain positivity regarding the housin demand in the forthcoming years, considering the quantum of office-sector development and infrastructure underway in the region. Presently, we see good traction in the development of infrastructure facilities in Rajarhat to support growth of IT/ITeS sector and in couple of years it will be capable of offering equal opportunity to the sector as has been offered by cities like Hyderabad, Pune and Chennai. However, it remains to be seen if adequate state government policies are formulated to attract major players in the IT/ITeS sector.