A two per cent decrease in stamp duty by the state government and a fall in circle rate have helped the real estate market in Kolkata
The real estate market in India has started seeing an uptick. Among other cities, Kolkata is also seeing a significant jump in realty sales. During January-March 2022, a total of 3,810 flats were sold in Kolkata, which is nearly triple the 1,320 flats sold a year ago. According to real estate consultant JLL, the first nine months of this year have seen the highest sales in the past seven years in Kolkata.
JLL Head (Research) Samantak Das said, “Flats are cheap in Kolkata, and a two per cent decrease in stamp duty by the state government and a fall in circle rate have helped the real estate market in Kolkata.”
Credai President (West Bengal) Sushil Mohta, which is also chairman of Merlin Group, speaks to News18 about the real estate market dynamics and the reason for the growth now.
Is there a sudden boom in the real estate sector in Kolkata?
The recent trend in sales for the first nine months of 2022 shows that there has been a boom in the real estate sector, which saw a dip in sales since 2016. It further nosedived in 2017 after the demonetisation. There is a pent-up demand as sales were slow prior to 2021.
The real estate sector started bouncing back since the last September 2020 as the COVID-19 pandemic brought in a paradigm change in the lifestyle of people in India. Mandatory stay indoors and work from home for a considerable period created an urge in people to look for their own houses who were staying in rented houses.
The COVID-19 also heralded a new trend among people living in flats to look for even spacious homes in gated communities to lead a quality life with all amenities. The stimulus provided by the state government by way of 2 per cent stamp duty cut and a 10 per cent reduction in circle rates has motivated even the fence-sitters to buy their first own house.
The continuation of the rebate four times till December this year further aided the spurt in sales. Though the home loan rate has gone up, this could not deter people from buying homes. According to a JLL report, the first nine months of 2022 have witnessed the highest home sales in Kolkata since 2015. This corroborated the trend.
We hope this disruption to continue with an increase in first-time homebuyers and their aspirations. The home loan rate has increased but it has not reached the rate that was prevalent 8-9 years ago. However, increasing the home loan rate will not deter customers and in the next three months, the sale will increase manifold to leverage the rebate in stamp duty.
What type of customers are going for homebuying?
The demand is driven by the affordable segment. However, there is a considerable rise in mid- and premium segments also, backed by the revival of the Indian economy, growth in the IT sector, and stable income.
Is it true that flats above Rs 1 crore are sold more than the realty units costing Rs 50-80 lakh?
Houses priced between Rs 50 lakh and 75 lakh still have a larger market share in Kolkata. We have witnessed 60 per cent of total sales for units priced between Rs 60 lakh and Rs 1 crore due to a rising incoming level. However, there has been an uptick in the sales of luxury flats above Rs 1 crore, indicating the rising demand for homes with bigger layout and availability of funds.
About 15 per cent of the units sold are above Rs 1 crore, and reputed developers in Kolkata are now launching luxury projects, nudging the aspirations of people with higher income. Also, people living outside the state are looking for quality homes in their hometowns which has made this possible. Merlin has come up with many premium-to-luxury projects in Kolkata. The prices are largely driven by the location and land value of the real estate project.
There is also demand in suburban areas and semi-urban areas up to around 25 per cent of sales, as many rural populations are shifting to apartments from their traditional homes.
The real estate marketing players also are happy with this growth. Speaking with News18, Jitendra Khaitan of Pioneer Property Management said, “Organic growth is there. Earlier, there were 200 projects. Now, they are 70-80. Now, serious developers are working only. With new rules, fly-by-night suppliers are not there in the market. The requirement size has increased now. The real estate market is positive.”
Experts said that even when home loan rates are high, this positive sale will help the market grow.
