KOLKATA October - December 2015
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InsiteQuarterly Real Estate Analysis for KOLKATA October - December 2015 Price Trends Growth Drivers Supply Analysis INTRODUCTION North Kolkata The 99acres.com Kolkata Insite report brings to you 1% major movements in the real estate market of the city Capital Growth in Oct-Nov-Dec 2015 as compared to Jul-Aug-Sep 2015. The report not only captures the significant trends across various localities in Kolkata but also brings to you the analysis and the insights that will make this report valuable for investors and end users. The report also includes an in-depth supply analysis to enable sellers and buyers determine the direction of the market. East Kolkata 0% West Kolkata 0% Content City Highlight : 06 Kolkata Kolkata Supply Analysis: 08 South Kolkata 0% 0% Methodology We have reported quarterly price movement of capital and rental values measured in per square feet for the analysis City Insite Report of Kolkata’s residential market. Effort has been made to Oct-Dec 2015 provide comparable and accurate city level data, since DEVELOPERS ABSTAIN prices and rents are floating and at any point may vary from increasing projects prices; from the actual numbers. sales volume improve 2 3 Realty Round-up Capital Rental Values Values Supply Delhi NCR Delhi NCR Mumbai Kolkata Bangalore Chennai Mumbai Pune Pune Hyderabad Hyderabad Chennai Bangalore Kolkata * Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com 4 5 KOLKATA Capital Analysis Rental Analysis City Highlights Top Performers in Kolkata (Capital Values) • The rental market in Kolkata remained relatively more buoyant as compared to the capital market. The average New Town rental values in the city grew by two per cent in the last The developer community in Kolkata remained cautious of the end-user need and hence restricted the 4% Durganagar one year (Oct-Dec 2015 vs. Oct-Dec 2014). temptation of hiking prices of their projects. This led to improved sales volume in the latter half of the 4% year. Orthodox pricing by developers also ensured limited growth of average capital values in the city Southern Avenue 5% 8% • More than 50 per cent of the tracked localities recorded Dum Dum during Oct-Dec 2015 as compared to the preceding quarter. a rise in rental values in the range of five to 11 per cent VIP Road 5% during Oct-Dec 2015 as compared to Oct-Dec 2014. Localities offering easy connectivity and proximity to • Kolkata witnessed new project launches in the affordable Q-o-Q Price Index IT hubs continued to be preferred as rental destinations. housing segment (Rs 20-40 lakh), thereby limiting the Bara Nagar 6% Most of these were in the South and North zones. average capital growth in the city. Developers consciously 7% Uttarpara • Tollygunge registered the highest rise in rental altered their product offerings to cater to the growing values in the city over the last one year. Owners demand for affordable and mid-segment housing. Ultadanga 6% Jan-Mar’15 3% were reluctant to reduce the ‘ask’ rate as the location • Sales picked up in the last two quarters of the year. 7% offers excellent connectivity through road and Metro. Industry reports revealed that Kolkata was the only 6% New Sodepur Moreover, proximity to Jadavpur, a premium area, also major city to have witnessed improved home sales in Alipore adds to its charm. the last quarter. Apr-Jun’15 2% • Locations along EM Bypass and its extension • The smart city project infused enthusiasm and buoyancy witnessed a mushrooming rental market. These in the real estate market of Kolkata. The city has already • Even though the absorption of residential units gained include places such as Garia and Narendrapur. submitted the plan for the smart city project seeking Jul-Sep’15 momentum in the city during the second half of the year, These locations recorded a rise of eight and nine per inclusion of localities such as New Town, Salt Lake, 1% the capital market remained stable in the absence of any cent, respectively in rental values since Oct-Dec 2014. Durgapur and Haldia in the list of first 20 townships to price hike by the developers. • Price competitiveness and metro connectivity have receive approval and funds. Oct-Dec’15 • Availability of land in North Kolkata aided developers to been common factors driving rental demand to Garia • Work in this direction has already begun in New Town, 0% construct projects that fit the budget requirements of a and Narendrapur from the tenant community. which includes use of pollution-free devices, developing major chunk of home buyers. Thus, the northern part of the • The underlying residential appeal of premium and green buildings and using smart public transport system city remained active with increased number of tractions in highly-priced localities like Salt Lake and New Town among others. The New Town Kolkata Development the Oct-Dec 2015 quarter. ensured a healthy rental demand in these areas. Rental Authority has announced incentives for developers • Micro markets in the North such as Dum Dum, Sodepur, values in these localities witnessed a rise of six to eight who would deploy green technologies in their Ultadanga, Baranagar, VIP Road and Durganagar clocked an per cent in the last one year. residential projects in the area. Further, there is a *The graph represents Q-o-Q change in average capital values in Kolkata average price rise of four to eight per cent in capital values proposal to introduce monorail in New Town to in the last three months. Affordable residential inventory enhance inter-city connectivity. priced in the range of Rs 2500-4000 per sq ft pushed Top Performers in Kolkata (Rental Values) • Several measures to upgrade infrastructure in the city • A cement company is set to start operations in Singur, just demand up in these areas. were announced in the last quarter of the year. For 40 km away from the city center. At a time when cost of • New Town has always been a preferred residential option instance, West Bengal requested the World Bank for a soft raw materials is on the rise, this comes as a relief for the owing to its impeccable planning and the presence of IT Salt Lake 6% loan of Rs 4,000 crore to complete projects like the rural real estate sector in the city. hubs in the vicinity. The real estate market in the locality 11% housing scheme and the rural road networking project. Jadavpur has been buoyant on the back of the smart city nomination. 6% Tollygunge This has pushed the ‘ask’ rates up by four per cent in the last three months. The proposal to have monorail connectivity is seen as an added attraction. New Town 8% • Residential pockets along the EM (Eastern Metropolitan) KEY INFLUENCERS Bypass witnessed strengthening of prices in the last 9% Dum Dum quarter of 2015. The widening of the corridor to a 12-lane Garia 8% Kolkata emerges as Initiatives under the North Kolkata Sluggishness in the expressway added to its residential appeal. the only major city grows as a commercial market smart city project • Kolkata Municipal Corporation (KMC) decided to lay a 9% 9% to record improved expected to give residential hub restricts growth in the Narendrapur dedicated water pipeline to supply filtered water to all Kaikhali home sales in the last a fillip to the real residential sector major complexes along EM Bypass. Localities along the quarter of 2015 estate sector stretch such as Garfa, Kasba, Picnic Garden, Patuli and Santoshpur recorded a rise of one to three per cent in capital values on this account. *Rental values represent yearly change 6 7 • Properties within the price range of Rs 25-40 lakh were largely Supply Analysis concentrated in South Kolkata in locations such as Garia, Behala and Narendrapur. 6% 5% • As developers focused on building and completing affordable 7% 4% Affordable and mid-segment properties dictated the dynamics of the Kolkata real estate market in the projects, supply of ultra-luxury housing (Rs 1-5 crore) suffered. last three months of 2015. Developers focused on building 2BHK units to gratify the need of the buyer Supply in the category witnessed a drop of three per cent in the community, who looked for properties largely in the price bracket of Rs 20-40 lakh. last three months. QoQ change in supply by 44% 41% BHK-wise Distribution of Property 48% Availability of Different Property Types (BHK) 45% • Apartments continued to capture more than 80 per cent of • Developers in Kolkata have been concentrating on reducing Jul-Sep 2015 the total market share of listed properties in Kolkata during the ticket size of their offerings in the last six months. This translated into a rising supply of smaller housing units in the Oct-Dec 2015 quarter. However, the segment witnessed a Oct-Dec 2015 9% slight drop of three per cent in its supply in the current quarter Oct-Dec 2015. While 1BHK units recorded a marginal rise, 5% 2BHK units noted a three per cent growth in supply during as compared to Jul-Sep 2015. 9% 3% the last quarter of 2015. • Due to the prime demand for budget housing options, 1BHK developers concentrated on completing apartment projects • Experts claim that the size of 2BHK units has shrunk over a 2BHK rather than independent homes or villas, which hurt the buyers’ period of time. Developers now offer a 2BHK unit sized at 3BHK QoQ change in supply by 4BHK pockets more than the former. Out of the total residential stock Property 750-850 sq ft instead of 900-1000 sq ft to meet the budget available in each zone, apartments captured more than 95 per requirements of the clientele.