After last year’s buoyant market, signs of sluggishness have set in the Kolkata real estate market, particularly in the residential segment.
While property prices in prime locations continue to witness an upward trend, they have stagnated to last year’s level in upcoming suburbs in absence of investments.
For instance, in the Rajarhat, the residential and industrial hub in the north-eastern fringes of Kolkata, and Sector V, the IT hub areas, prices have stagnated between Rs 2,500 and Rs 3,000 for almost a year now, even though construction cost has risen about 25 % in the last six months.
Over the last two-three years, residential property prices in the area had gone up by over 50 per cent, and developers had anticipated more than 15-20 per cent rise by this time.
Meanwhile, the growth in property prices (both rentals and outright sale), in the central business district (CBD) of the city, have outpaced that in the Rajarhat.
The commercial rentals in the CBD area rose more than 50 % at around Rs 100 per square feet over the last three-four months, while rental values in Rajarhat area remained steady at Rs 50-60 per square feet. According to Mr. Himon Sanyal, head, business development, TCG Real Estate, the reason for the unprecedented rental growth in the CBD is linked to a relative slowdown in the construction activity in Rajarhat, along with its yet-to-be-developed infrastructure. “In residential projects particularly, non-residential Indians are not as eager to invest in Kolkata, as they were a year ago, due to fluctuating dollar prices and the overall slump in real estate,” Sanyal said.
Developers are not willing to launch new projects and delaying the existing ones by two-three months, as they fear a price correction to happen in the coming months, think property experts. For example, TCG Real Estate, which had planned to launch a new project at Sector V in June this year, will now launch it on or after October.