The Covid lockdown followed by rising raw material costs made the city’s real estate sector bleed for a long time. However, the last couple of quarters saw a sharp recovery in demand owing to low home loan rates, reduced stamp duty and weakening of the pandemic. Realty players are expecting record sales in the upcoming festive season
The city’s real estate sector seems to have left behind the pandemic-hit lean period with leading industry players witnessing aggressive growth in the last few quarters. The segment is now gearing up to embrace the festive season, which some feel would be one of the best in many years for the industry. Leading real estate consultants are also hopeful that the next few quarters will be even better.
RECOVERY DAYS
Reports for the first two quarters of this calendar year released by real estate apex body CREDAI and many consultants show that the industry in and around the City of Joy is experiencing a sharp recovery after a long Covid-19 slump.
In the first half of 2022, residential sales in Kolkata surged by 39% YoY (year-on-year) with 7,090 units being sold during the period, said international property consultant. As per its observation, the first half of this year was much better than the year-ago period — both in terms of project launches and sales of housing units. “Kolkata has witnessed a whopping 205% growth in launches to 6,686 and 39% growth in sales in the first half (H1) of this Year to 7,090.” They added.
According to another global Commercial Real Estate Services company, housing sales in greater Kolkata increased by 4% QOQ to 3,947 units during the second quarter of 2022 (April-June), marking a sustained recovery in the Kolkata residential realty market. “On a half-yearly comparison basis, H1 of 2022 was up by 300% compared to the pandemic-hit H1 of 2021,” it added.
FORDABLE ARENA
The affordable housing segment has always been the homebuyer’s top choice in the city. The east Kolkata market had the largest sales with a 33% market pie followed by south at 22%. The segment was witnessing a robust demand and if that continues, there would not be many quality stocks left by 2023. Another real estate Senior Management Staff said that the Covid crisis had shown the importance of owning a home. “We feel people have understood the necessity of the same and have made moves in purchasing own homes,” he added. A big real estate agency believes that need-based buyers in Kolkata go for the affordable segment, which is seeing a significant growth. “Prices have gone up in the re-cent past for a variety of factors. Increased raw material (steel and cement) costs have forced developers to raise realty rates,” he added.
SALES SURGE
- Residential sales in Kolkata went up — by 39% YoY in the first half of 2022
- During April-June, 2022, realty sales rl rose 4% QoQ to 3,947 units
- East Kolkata had the largest sales with 33% market share in Q1
- Southern part of the megacity came second with 21% market pie
- There has been 8% rise in price Y-o-Y in Q2 while 2% in Q-o-Q
ROBUST DEMAND
As per a study conducted by CREDAI, the price trend in Kolkata firmly denotes a robust demand. There has been an 8% YoY jump in prices in the second quarter of this calendar year while it was 2% in QoQ The real estate apex body estimated that the average price in the new properties across the megacity is Rs 6,382/sq ft. Kolkata south-west and Howrah witnessed the highest YoY surge in prices at 13%, CREDAI added. The percentage share of unsold inventory in Kolkata, at 5%, was on the lower side compared to Mumbai’s 36%, Delhi NCR’s 14%, Bengalum’s 7% and even Hyderabad’s 8%. As per the CREDAI study, unsold inventory in Kolkata dropped by 14% YoY in Q2 of this year, of which 51% falls under Rs 5,000/sq ft to Rs 7,500/sq ft category.
GROWTH FACTORS
Following a short-term disruption owing to the Covid-induced lockdown the Kolkata residential realty market has recovered remarkably, feels a Real Estate Support Agency in India.
“Kolkata as a metro city and home to old business houses with great connectivity to domestic and international flights has prompted the rise in demand for luxury residential. Some of the recent residential launches in 2021 and 2022 have received a positive response from the IINLs (high-Net worth individuals) and UHNIs (Ultra high-net worth individuals) end users”.
“We have achieved good sales owing to low home loan rates, the extension of the reduced stamp duty rate by the government of West Bengal and weakening of the pandemic. Many fence sitters had made the move understanding the value and security of owning their own homes” said a real estate developer
FESTIVE PUSH
CREDAI West Bengal, feels that the upcoming festive season will be diluting the gloom to a big extent. “Empirical data shows that the best period for real estate sales in general remains from October to February. At the end of the international financial year in December, a majority of NRIs come home to celebrate Pujas followed by Christmas and New Year. This results in speedy closure of realty deals by the decision makers. Markets should see a strong movement after Diwali”. The next two quarters will usher in a healthy demand and supply consumption ratio.
CREDAI noted that the market had surpassed pre-Covid levels. “We expect record sales during the festive season across all segments. Both premium and of segments are expected to do well. Prices have moved up primarily because of the rise in input cost and overall demand”.
A director of a leading developer company said that the industry had been witnessing robust demand for quality spaces for the last two quarters. “Post April, there has been a steady flow of new project launches”.
MD of another leading developer added that good times are foreseen due to early Durga Puja in 2022. Typically, there is a slow take-off leading up to Puja. However, this year it is expected a longer auspicious sale period because of early Pujas”.
Source: Times Bengal