Fewer launches drag Kolkata’s residential realty market downhill: Knight Frank
The city’s residential realty market, which had seen a spike in supply in 2014, has suffered a steady slump through the following two years. From nearly 30,000 units launched in 2014, there has been a 30% decline in 2016, according to Knight Frank India.
A pile-up in inventory and tepid demand for luxury properties have driven the market downhill, according to the global property consultant.
“The Kolkata residential market had remained relatively stable in the first half of 2016 (calendar year) on a year-on-year basis with expectations of improvement in the second half. However, the demonetisation has changed the market scenario in the last quarter of the year and led developers and buyers alike to refrain from making any property-related decisions,“ said Samantak Das, chief economist and national director of research at Knight Frank India.
Builders like Siddha, Mani, Jain Group and Forum Group hardly announced any new projects, as most of them struggled to sell the luxury offerings they came up with in the past two years. “The flurry of legislation that has been in discussion has left us confused. There is GST and then RERA and so on. Everybody is trying to be on the right side of compliance officers. The market focus has shifted from bringing in newer products to selling off the older stock,“ said Rishi Jain, executive director of the Jain Group.
Property launches fell 15% in the second half of 2016 as against the previous corresponding period. In the last quarter of 2016, it was steeper at 25% when compared to the same period a year ago.
While North Kolkata has thrown up the worst figures in the last two years, south has a somewhat better score. Rajarhat remained the preferred location for the builders. Around 34% of the new products launched in the second half of 2016 were from South Kolkata -up from 27% a year ago.
“Lack of land parcels has been the biggest hurdle in the North. North Kolkata’s share in fresh properties was down to nearly 20% in the second half of 2016 as against a 15% drop in the same period of 2015,“ said Champalall Baid, director at Champalall and Co, a city-based real estate consultant. Around 40% of the fresh properties launched in the second half of 2016 were in Rajarhat, though this was lower than a year back.