Knight Frank India, a premium international property consultant, in their flagship market assessment report “India Real Estate January – June 2021”– that evaluates the performance of residential assets classes in top eight markets of India – cited that new home sales in Kolkata witnessed a significant growth of 74%year-on-year (YoY) to 5,115 units in H1 2021 as compared to 2,937 units in H1 2020. With respect tonew launches, the city witnessed a rise of 156% YoY to 2,195 units as compared to 858 units in H1 2020.The growth is largely on account of the lower base of H1 2020, a period whichwitnessed a washout quarter of Q2 2020 during the first wave of the COVID-19 pandemic.
For the seventh consecutive quarter, residential sales have outpaced new launches in Kolkata. This contributed to a sequential decline in unsold inventory which stood at 25,240 units, an 18% YoY decline over H1 2020.
KOLKATA MARKET SUMMARY
|Parameter||H1 2020||H1 2021||Change (YoY)|
|Launches (housing units)||858||2,195||156%|
|Sales (housing units)||2,937||5,115||74%|
|Price (weighted average)||INR 33,433/sq m
(INR 3,106/sq ft)
|INR 34,595/sq m
(INR 3,214/sq ft)
|Unsold inventory (housing units)||30,845||25,240||-18%|
Note: 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
The residential sales in Kolkata started to show resurgence, especially during Q3 2020 and Q4 2020;and Q1 2021 saw many developers reporting the prevalence of a positive homebuyer sentiment. However, with the second wave of the pandemic unfolding in Q2 2021, residential real estate demand was again impacted in the quarter.
Sales of homes costing less than INR 50 lakhs continued to dominate the overall residential sales volume in Kolkata with a 63% share. Homes costing over INR 1 crore constituted about 13% of all sales during this period, a rise when compared to a 7% share in H1 2020. The high-end segment too witnessed a revival in demand, indicating homebuyer preference for spacious homes.
In H1 2021, new residential launches stood at 2,195 units.Compared to H1 2020, this is a healthy increase of 2.5 times, mainly due to the lower base effect. Before the city went into a conditional lockdown in Q2 2021, many developers had launched new projects. The new residential supply was largely introduced in the affordable and mid-segment category in locations such as Howrah, EM Bypass, Narendrapur, Rajarhat and other fringe areas in northern Kolkata.
Swapan Dutta, Branch Director – Kolkata, Knight Frank India said, “Despite the two waves of the COVID pandemic that has disrupted economy, Kolkata residential market remained resilient. The increase in sales momentum paired with the stable prices indicates a buyer friendly environment. The recent budget announcement by the State Government with regards to reduction in stamp duty by 2% and circle rates by 10% is sure to drive demand. This announcement will provide a much needed morale boost to the real estate sector in the region. Developers are likely to introduce new-supply in the short term to service the potential demand.”
Residential prices in Kolkata increased by 3%YoY in H1 2021 to INR 34,595/sq m (INR 3,214/sq ft). This is largely attributed to a healthy movement in ready to move in inventory and declining stock in some locations.