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Kolkata witnessed a 39 per cent increase in sale of residential property at 7,090 housing units during the first half of calendar year 2022. The extension of the two per cent government rebate on stamp duty for property registration in March 2022 has supported sales in the market.
High demand coupled with increasing raw material costs have led to a four per cent y-o-y increase in average residential prices in H1 2022. Several reputed developers have been able to command a premium for their under-construction residential developments.
South Kolkata continued to dominate the city’s residential space, accounting for a market share of 31 per cent share. Due to sustained demand and low home loan interest rates, drop in ready-to-move-in inventory, real estate developers have launched residential projects totalling over 6,686 residential units, Knight Frank India said in its latest report.
“The continuous reduction in Kolkata’s unsold inventory has also led the quarters-to-sell (QTS) for the city to reduced from 9.8 in H1 2021 to 6.1 in H1 2022. QTS is the number of quarters required to exhaust the existing unsold inventory in the market,” the report said.
According to Shishir Baijal, Chairman and Managing Director, Knight Frank India, in line with the previous year, the trend of preference for a bigger apartment size amongst homebuyers remains a dominant theme in the residential market in Kolkata.
Due to two consecutive repo rate hikes, housing affordability in the near term has been impacted and the new residential business cycle is likely to witness a rise in both volume and price.
Buoyant demand for office market
The office market performance during the first half of current year remained steady for Kolkata’s market with transaction volumes increasing by 128 per cent y-o-y to 0.6 million sq ft in this period. New office completions were recorded at 0.2 million sq ft during the same period.
However, Kolkata’s office space vacancy remains the second highest in India’s top eight markets. Despite a healthy resurgence in office space demand in H1 2022, the office space vacancy increased by 73 basis points to 42.5 per cent mainly due to new office space completions, the report said.
In office space, IT and BFSI sectors witnessed an expansion in their share during H1 2022. The IT sector’s share in Kolkata’s transaction volume increased from 35 per cent in H1 2021 to 39 per cent in H1 2022 while BFSI sector’s share increased from 7 per cent to 20 per cent in the same period. Co-working, which accounted for 15 per cent of the city’s office transactions volume in H1 2021, remained steady with a share of 14 per cent in H1 2022.
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