Demand revival in Kolkata realty market driven by end-users
There has been a demand revival in the Kolkata residential market following Durga Puja. This can be attributed to the sluggish economic growth as well as to the reduction in the property transaction rate. Developers have compromised on their margins by reducing prices on residential property. Besides, various discount schemes have been offered to buyers. They include cash discounts, gift in the form of gold coins, electronic goods etc as well as flexible payment plans.
Demand more in east and south of city:
While there has been a drop in investments in the Kolkata realty market, there has been an increase in enquiries from end-users, particularly in the price range between Rs.20-50 lakh. Demand was comparatively less for premium residential properties worth Rs.50 lakh and above. Besides, areas in the east and south of Kolkata witnessed considerably higher demand compared to areas in the north and west of the city.
Areas in demand in South Kolkata:
Some of the areas in South Kolkata where demand was comparatively more were in the stretch between Kalikapur and Garia, along the EM bypass. More than 60% of the buyers were interested in 2BHK residential units measuring between 900-1200 sq.ft, with a price range between Rs.20-45 lakh. The rest of the buyers preffered 3 BHK units of sizes between 1200-1400 sq.ft, with a price range between Rs.40 and 65 lakh.
Rental values remain stable:
Rental values across the city did not record any significant change in the last year. This can be attributed to the low migration rate to the city, owing to the fall in the rate of hiring across companies in the city. Besides, the availability of different rental options in different areas of the city kept the rental rates stable. Contrary to the general trend across the city, areas like Salt Lake and Rajarhat witnessed an upsurge in demand. Rentals for a standard 2 BHK apartment with regular facilities ranged between Rs.10,000-14,000 per month, while for a 3 BHK apartment, the rentals were between Rs.14,000-18,000 per month.
Infrastructure projects drive demand:
Demand in the east and south of Kolkata is primarily driven by several infrastructure projects that are in various stages of construction. Some of these projects include the road widening project of EM bypass into an eight-lane speed corridor which is expected to be completed by 2015. Besides, there is a Bus Rapid Transit System (BRTS) project that is proposed to come up along the EM bypass corridor between Bariapur to Barasaab. Some of the other projects that are in the pipeline include the extension of the metro line connecting Salt Lake to Howrah and Rajarhat as well as the flyover project from Jadavpur to Dhakuria.
Price escalation expected by March, 2014:
In the current scenario, property prices are expected to remain stable in Kolkata, at least for the next 4-5 months. This is due to the slow transaction rate as well as the cautious approach adopted by buyers. However, it is presumed that there could be a price escalation upto 10% in the city after March, 2014. From a buyers perspective, it would be an appropriate time to invest in residential property till prices start going upwards.
