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KOLKATA RESIDENTIAL MARKET UPDATE JULY - SEPTEMBER 2020

Market Sentiment WHAT’S INSIDE?

• Impact of COVID-19 on Indian Real Estate • National Outlook Snapshot of real estate ambience across top 8 metro cities • Market Movers News that impacted ’s realty market in Jul-Sep 2020 • Commercial real estate outlook • Residential demand and supply dynamics • 99acres’ Outlook Our perspective on the current market sentiment • Key trends in the buying and renting landscape • Price trends across key micro-markets

FROM CBO’S DESK

The Jul-Sep 2020 quarter set the pace for the recovery of Indian developers have further fueled the penchant for ready or near-ready residential real estate market. Post an initial lull in sales and new housing units. There seems to be a newfound demand for independent launches in the previous quarter, the current quarter came as a breather houses and builder floors, which offer increased privacy and scope for as sales resurged by almost 2.5 times of the pre-COVID levels. Both Delhi social distancing, as opposed to residential apartments. NCR and Mumbai saw a significant improvement in transactions, QoQ, as end-users flocked to leverage the lucrative deals floating in the market. A gradual improvement in the realty market was also evident from the Price correction, unlike anticipated, remained a far cry; however, with owner listings posted on 99acres, which went up by seven percent against a negotiation window of up to 10-15 percent, the deals closed in at a the pre-COVID times. Buyer responses also reported a 30 percent surge in reduced price of 2-5 percent of the pre-COVID levels. the same time period.

New launches went up, QoQ, but remained lower than the previous year. On the policy framework front, a fiscal stimulus of Rs 10,000 crore for Majority of the developers focused on completing the ongoing projects, Maneesh Upadhyaya stuck realty projects, along with the sustenance of Repo Rate at four which were stuck during the nationwide lockdown. While work on Chief Business Officer percent, an all-time low, are likely to push the market towards a revival almost all housing projects resumed in the current quarter, a lot of them 99acres.com in the ensuing quarters. The upcoming festive season may see a further continue to face delays spanning quarters. Liquidity constraints with the improvement in the absorption of residential units, across cities. COVID-19 AND REAL ESTATE NATIONAL OUTLOOK

IMPACT ON HOMEBUYERS IMPACT ON INDUSTRY HOME BUYING SENTIMENT PROPERTY PRICES

After an initial set back amid pay cuts Even as supply chain reopened in Home buying sentiment improved The resale segment remained under and job losses, homebuyers were seen Jul-Sep 2020, a ban on Chinese imports as public sector banks and private pressure with deals closing at a returning to the market in Jul-Sep 2020. impacted the cost of development in players slashed home loan interest 2-5 percent discounted rate on average. Reduced home loan rates, sweetened the realty landscape. Developers cited rates to a 15-year low. This, along Developers also kept new unit prices deals by developers and more scope of increased expenses, and thus, little with resumption of construction unchanged even as some spoke of negotiations in the resale segment were scope to reduce prices in the primary work, helped take the enquiries up by increased costs amid a ban on Chinese seen as the key drivers. The quarter market. Yet, in a bid to offload the 80 percent of the pre-COVID times. imports. However, initial speculations of continued witnessing the popularity existing inventory, several schemes Developers reported a 50 percent hefty price corrections did not hold true of ready housing units, and improved were introduced in the quarter. recovery in the number of transactions. for either of the segments. demand for independent houses and Digital transformation continued as builder floors in most metro cities. developers took to the online medium RENTAL LANDSCAPE SUPPLY Window shoppers exited and genuine to interact with potential homebuyers Rental market remained in doldrums With an addition of over 31,000 units homebuyers were seen leveraging at various stages of the buying cycle. despite the opening up of the in metro cities, new launches went up the discounts available in the market. Several governmental procedures nationwide lockdown. Tenants avoided by 4.5 times, QoQ. The resale segment, Noticeably, the quarter reported shifted online as organisations adopted moving as the majority of offices too, reported an improvement as renewed interest from the NRI homebuyer to the new normal. The infusion of continued with the work-from-home several property owners returned to community against the backdrop of Rs 10,000 crore to aid the completion model. Resultantly, the rental rates the market after lockdown restrictions depreciating rupee and attractive deals of stuck realty projects was hailed by did not see any movement and offtake were gradually lifted. Unsold inventory in the new home category. the industry. was meek in both residential and stood at 4.40 lakh units at the end of commercial segments. September 2020.

CHENNAI DELHI NCR 1% 3% SHARE OF NEW LAUNCHES AHMEDABAD 16% MUMBAI 25% The quarter witnessed the launch of about 240 new residential projects in top eight metro cities. Despite being severely hit by the Coronavirus pandemic, Mumbai led all cities with a 25 percent share in new and re-launched projects. Pune, Hyderabad, Bangalore and Ahmedabad followed suit with a 16-19 percent share, each. Delhi NCR made a meagre three percent share of the total new launches, with a few projects in Greater Noida, Ghaziabad and Gurgaon. KOLKATA Kolkata and Chennai reported minimal new activity from developers. 1%

BANGALORE 17% PUNE 19% Note: The data depicts share of new launches across metro cities in the studied quarter The numbers include re-launched projects

HYDERABAD 18% MARKET MOVERS COMMERCIAL REAL ESTATE OUTLOOK Metro projects progress in State approves the tallest full swing flyover in Kolkata • Demand for the co-working spaces • Many companies negotiated for The trials for Automatic Train The State government approved the gained momentum over large rental concessions or extensions on Operation (ATO) mode for the East- design for Ruby Flyover connecting office spaces in Salt Lake Sector their existing lease agreements. West Metro began in July. Further, Kalikapur to VIP Bazaar on EM V this quarter. The micro-market • Developers offered benefits, such the work on the 16.87 km-long Bypass. This six-lane flyover will is anticipated to witness supply as rent-free period and reduction Noapara– Metro and land be the tallest flyover with a height addition of 0.11 million sq ft by in common area maintenance acquisition process for 2.8 km-long of 12 meters. The project shall be the next quarter. charges, to rationalise the overall underground tunnel between Joka and ready in three years from the date • The city recorded gross leasing of expenditure of businesses, Esplanade resumed in September. of commencement of work. It is one 0.44 million sq ft, an increase which are severely hit due to The proposed New – Airport of the most-awaited infrastructure by 2.7 times in Jul-Sep 2020 vs economic slowdown and COVID-19 metro corridor also received a budget projects for the city. Apr-Jun 2020. led lockdown. approval of Rs 527 crore. • Higher vacancy rate reported • WoodenStreet, a custom furniture as many IT/ITeS companies startup, leased retail space in Salt surrendered office spaces to adopt Lake to open an experience store. the work-from-home model. The vacancy rate in Kolkata stood at Waste compactor No interest on property tax 32.5 percent in Q3 2020. dues installation made mandatory The civic body introduced a scheme to waive off interest on property tax dues The authority made the waste till March 31, 2020. Property owners compactor station mandatory for can apply for the interest waiver on new residential projects with a the unpaid amount from October built-up area of over two lakh sq ft. 2020. It will enable defaulters to pay The move is aimed at improving the the dues and support civic authorities waste management system in the to clear payables of contractors and city. In case the developer fails to fund essential services. comply, the civic body will install the system against the payment of Rs 40 lakh.

acres ’s No.1 Property Portal KOLKATA’S REALTY AT A GLANCE Property Prices Rental Rates Demand Supply

BUDGET-WISE DEMAND AND SUPPLY Key micro-markets across budget segments

Budget Localities based on Average Average Rental Jul-Sep 2020 Range Consumer Demand and Property Prices Rental ‘Asks’ Yield Active Listings (Rs per sq ft) (Rs per sq ft/month)

Within Rs 40 lakh Barasat 2,000-2,600 9 3.86% 2,600-3,000 11 4.40% -29% Sonarpur 2,600-3,300 9 3.38% Rs 40 lakh - Rs 1 crore 3,700-5,000 13 3.22% Garia 3,400-4,100 14 4.11% Baguihati 2,900-3,300 12 4.31% 22% Rs 1 crore and above Salt Lake 6,200-6,900 20 3.89% Demand 4,500-6,600 19 4.11% 7% 81% 52%0% 15% 37% 11% Supply 4% 4,100-5,400 17 3.93% Within Rs 40 lakh Rs 40 lakh - Rs 1 crore Rs 1 crore and above Note: Rental Yield has been calculated for a 1,000 sq ft apartment. Average property prices and rental rates have been calculated as per listings posted on 99acres.com in the studied quarter. The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments.

BHK-WISE DEMAND AND SUPPLY Key micro-markets across BHK-configurations

Configuration Localities based on Average Average -7% Jul-Sep 2020 Consumer Demand and Unit Size Property Prices Active Listings (Sq ft) (Rs per sq ft)

1BHK Baguihati 430-600 2,900-3,300 Garia 450-500 3,400-4,100 2BHK Rajarhat 800-860 3,700-5,000 11% Salt Lake 860-900 6,200-6,900 Action Area III 590-620 4,400-5,000

-2% 3BHK 1,000-1,050 2,600-3,300 Bhawanipore 1,340-1,380 7,900-9,990 Demand -2% Lake Town 1,220-1,300 4,300-5,900 17% 15%0% 54% 47% 23% 34% 6% 4% Supply Note: Average property prices and rental rates have been calculated as per listings posted on 99acres.com in 1BHK 2BHK 3BHK 4BHK the studied quarter. The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments.

Note: Supply is basis properties listed on 99acres.com in the studied quarter. Demand is basis queries received on 99acres.com in the studied quarter. INSITE : KOLKATA 9 ZONAL SHARE OF acres NEW LAUNCHES India’s No.1 Property Portal

The city saw the addition of a mere three North Kolkata housing projects in Jul-Sep 2020. South 33% 99ACRES’ OUTLOOK Kolkata captured almost 70 percent share of the total new units launched. The pace of new launches continues to be slow as Kolkata’s real estate market witnessed unsold inventory remained unchanged at developers reel under liquidity constraints in improved site visits, enquiries and sales 30,000 housing units. the COVID-19 world. in Jul-Sep 2020, as against Apr-Jun 2020. However, the property prices and rental The city witnessed renewed demand ‘asks’ did not alter in the studied period. for the popular residential areas of East South Kolkata and South Kolkata. In comparison to 67% Note: The data depicts share of new launches While the site visits for new properties the previous quarter, sales also showed across zones in Kolkata in the studied quarter. have reached the pre-COVID level, those modest improvement. However, the for resale and rental markets remained unstable job market increased the low as several societies put restrictions timeframe of sale conversion. on the entry of non-residents in the wake of COVID-19. The opening of the Majerhat Bridge and the commencement of Noapara – Builders deferred residential launches Dakshineshwar metro line in the next RENTAL due to the ongoing economic slowdown, quarter may bolster realty growth of unstable job market and higher demand the neighbouring locales. In addition, LANDSCAPE for ready homes. A few established residential launches in the most builders launched about 100–150 preferred segment, i.e. affordable housing units in North and South housing, will also act as a key driver Key micro-markets based on consumer demand and active listings Kolkata. With restricted project launches to bridge the inventory shortfall and Localities Most Supplied Market Rental Rates YoY % and sluggish sales environment, the improve sales in the ensuing months. Rental Units Share (Rs per Month) Change in Rental ‘Asks’

New Town 2BHK 39% 10,500-13,500 0% 3BHK 35% 16,500-20,500

Rajarhat 3BHK 64% 12,000-15,000 -4% 1BHK 33% 6,000-9,000

Kestopur 2BHK 85% 7,000-7,500 -8% 1BHK 8% 4,000-5,000

Garia 2BHK 49% 8,500-11,000 -3% 3BHK 44% 13,500-15,500

Baguihati 1BHK 62% 4,500-7,000 0% 2BHK 23% 7,000-9,000

Note: Average rental rates and supply have been calculated as per listings posted on 99acres.com in the studied quarter. Key micro-markets have been selected based on expressions of interest raised on 99acres.com in the studied quarter.

INSITE : KOLKATA 11 KEY HIGHLIGHTS CONCLUDING REMARKS

After a steep fall in enquiries and sales last quarter, The demand for affordable housing, i.e. properties priced within Kolkata’s realty saw a modest recovery in Jul-Sep 2020. Rs 40 lakh, remained at the cynosure of the potential homebuyers. Localities from East and South Kolkata, such as Rajarhat, While there was a noticeable growth in enquiries during the studied New Town, EM Bypass Extension, Joka and , quarter, the tenure from site-visit-to-closure increased due to witnessed renewed interest and received responses dampened job market. Real estate developers also deferred new equivalent to pre-COVID figures. residential launches till the next quarter. The builders relied on digital mediums to attract serious buyers, who remained largely inclined About 80 percent demand lies for 2 BHK and 3 BHK homes priced within Rs 40 lakh in Kolkata. There was, however, an towards ready housing units. With ‘Durga Puja’ round the corner, the unmet supply by 25 percent. The premium inventory has sales may take a hit in October but are likely to go north in the next taken a backseat and is not expected to revive in the next two months of the quarter. few quarters.

The dampened job market and resultant shrunken pockets made potential buyers sceptical of investing in the real estate market.

While developers heightened the use of digital mediums, such as virtual walkthroughs, video calls and e-brochures, to offer a viable solution to serious homebuyers, a major share of buyers still preferred physical site visits before deal closures.

The opening of East-West’s underground metro station from the first week of October 2020 is likely to act as a growth catalyst for the region and neighbouring areas such as , CIT Road and .

On the other hand, the residential rental market remained dull for the second consecutive quarter, as the majority of the migrant population continued working remotely from their hometowns. Furthermore, the housing societies imposing restrictions on site visits and the tenant community trying to renegotiate the lease terms also impaired the rental trend in the city. With subdued demand, the vacancy level of rental accommodations remained high in the city.

INSITE : KOLKATA 13 ANNEXURES METHODOLOGY

The Insite Report by 99acres.com properties across varied budget captures the trends in the capital segments and BHK configurations. and rental markets across top The report also gives insight into eight metro cities – Delhi NCR, the key micro-markets based on CAPITAL VALUES RENTAL VALUES Mumbai Metropolitan Region consumer demand and active listings (MMR), Bangalore, Pune, Chennai, in the rental market. While demand is Locality Jul-Sep 2020 Locality Jul-Sep 2020 Locality Jul-Sep 2020 Hyderabad, Kolkata and Ahmedabad. a function of expressions of interest In order to assess the prevailing raised on 99acres.com, supply is Action Area I 5000 3000 Action Area I 16 sentiment, the report delves based on property listings posted on Action Area II 4800 Madurdaha 4400 Action Area III 15 deep into demand and supply of 99acres.com in Jul-Sep 2020. Action Area III 4900 Mahamayatala 3800 33 FIND BEST OPTIONS TO 2600 3550 Baguihati 12 U SELL RENT PRPERT Alipore 13200 Mukundapur 5250 28 Bagha Jatin 3910 4520 16 Baguihati 3200 Narayanpur 3600 Behala 13 FIND BEST OPTIONS TO Ballygunge 10280 3950 Bhawanipore 26 Bansdroni 3700 Nayabad 3300 Chinar Park 12 BUY, SELL, RENT PROPERTY Bara Nagar 3400 Netaji Nagar 3850 20 Barasat 2590 6900 12 Price trends and Barrackpore 2800 3590 Garia 14 Mobile App property advice Behala 3750 6970 Gariahat 29 on Android platform and iOS Bhawanipore 9950 Patuli 5200 18 3100 4500 Jadavpur 17 Brahmapur 3230 Purbalok 4880 22 Genuine listings with Chinar Park 4200 Rajarhat 4850 Joka 10 Over 9.32 lakh property photographs 3750 Rajpur 3050 14 listings Dum Dum 3100 Sakher Bazar 3850 Kalikapur 16 Dunlop 4000 Salt Lake 6300 Kasba 18 4550 Santoshpur 4550 11 Garia 4090 Sodepur 3080 19

Haltu 6200 Sonarpur 3000 Lake Town 16 More than Jadavpur 5040 3900 Madhyamgram 11 1.7 lakh projects Jodhpur Park 7800 3200 Maheshtala 11 Joka 4450 Tollygunge 5400 Mukundapur 17 Kaikhali 4100 7400 Naktala 15 Kalikapur 4750 6850 Narendrapur 13 3900 3240 New Alipore 22 Kankurgachi 7700 New Garia 17 Kasba 5400 Park Circus 20 Kestopur 3400 Patuli 15 Khardah 2900 Rajarhat 13 CONTACT US Lake Gardens 6100 Salt Lake 20 0120 4879400 Lake Town 4800 Tollygunge 19 Monday - Friday 9:30 AM to 6:30 PM IST *All prices are per sq ft rates acres India’s No.1 Property Portal Email: [email protected] 15 CNTACT US 0120 4879400 Monday - Friday 9:30 AM to 6:30 PM IST Email: [email protected]