Growth of Kolkata Real Estate Market
In conversation with Harshavardhan Neotia, Chairman, Ambuja Neotia Group’s speaking about the development of the Kolkata improvement in the road connectivity, have given a fillip to these peripheral areas.
1. What are the infrastructure & policy challenges for Kolkata?
Over the past few years, Kolkata has witnessed significant infrastructure development. Now, with the real estate market in the main city area reaching a saturation point, fresh developments are taking place along the city’s periphery. The development of the metro and improvements in the road connectivity, have given a fillip to these peripheral areas.
Business environment for real estate has seen rapid change with series of reforms in the form of implementation of Real Estate (Regulation & Development) Act, 2016, the Goods & Services Tax (GST), Benami Properties (Prevention) Act etc.With issues around the West Bengal Housing Industry Regulatory Authority (WBHIRA), the State’s RERA authority, have started settling down. Initial teething troubles and project registrations under the new law had led to some difficulties for developers.
2. How do you foresee the real estate growth in this area in the next 5 years?
Poor home sales, high vacancies in commercial real estate, and a slowdown in launches paint a not-so-rosy picture of Kolkata’s real estate sector. According to a report, home sales in Kolkata have been a mixed bag over the first nine months of 2019. While branded real estate developers have seen steady offtake and improvement in sentiment, smaller players and standalone projects are yet to gain any sales momentum.
Sluggish sales and unsold inventory have been putting pressure on the cash flow of developers.
Project launches continue to be on the decline, with the focus being primarily on reducing unsold stock. Affordable housing (below ₹50 lakh) continues to be the main draw. Market sources say advertisement and promotional schemes by branded operators have led to some improvement in sentiment for bigger projects.
I foresee improved real estate growth in the next 3 years. The expectation of the buyers and developers ought to rise as the sector has witnessed lots of new government policies. These policies will help the industry to be more organized and transparent and will provide a boost to both the residential as well as commercial real estate segments.
3. What are the overall key factors contributing to Kolkata city’s growth activity?
Kolkata, the 14th largest city in the world, the ‘cultural capital of India’ and the ‘City of Joy’ has grown from a colonial port city to a giant megalopolis with a population of over 14 million. The city is well connected to different parts of India as well as South-East Asian countries via the National Highway 34, Kolkata–Delhi and Kolkata–Chennai Golden Quadrilateral Roads, and Netaji Subhas Chandra Bose International Airport.
Being the only mega agglomeration hub of economic, political and business activities as well as the educational and cultural pivot of Eastern India, Kolkata has held enormous geopolitical importance for decades. Also, more money in the hands of the people because of the boom in the IT and ITeS sector appears to be significant.
4. The reasons for developers and investors growing interest in Kolkata and other East India cities
The real-estate market in Kolkata and other East India cities is more realistically priced as compared to other metro realty markets like Mumbai, Delhi, Bangalore or Hyderabad. Also more corporatized developers are entering the market, thereby improving the transparency of dealing and quality of the offering.