December 22, 2018

The Growth of Residential Realty in Kolkata

Kolkata, traditionally an end-user driven market has exhibited vibrant growth in residential real estate market in the past few years. The core city grows exponentially over time, both towards north and south directions, with corresponding development of social and civic infrastructure due to population explosion and fast urbanization. The same have been the driving force for sustainable demand for affordable residential properties in and around Kolkata.

The realistic value proposition for the residential units, strong market foundation and relatively stable political scenario have given competitive edge for Kolkata over the other metro cities in India. The introduction of HIRA (Housing Industry Regulatory Authority) from 1st June 2018 has further strengthened the market nerves in terms of transparency, accountability and trust. It has been recorded that majority of the ongoing residential projects and just completed projects from reputed builders in city and suburb locations have been showing steady absorption over last few quarters.

Kolkata has witnessed many new launches especially around the city suburb areas like Birati, Madhyamgram, Barasat, Belghoria, Sodepur, Barrackpore etc. in the north and Garia, Boral, Narendrapur, Baruipur, Behala, Thakurpukur, Joka, etc., in the south to meet the continuous demand from the buyers. These areas give good value for money. BT road and Jessore Road are the major northern suburb thoroughfares which have seen rapid construction activities due to gradually improving transport and civic facilities and the availability of suburban railway network running parallel to these roads. In the southern suburbs, the fast development and metro connectivity alongside of the long stretches of Diamond Harbour Road (Joka, Thakurpur, Amtala) and NSC Bose Road (Tollygunj-Garia-Baruipur) have been instrumental for its transformation as a preferred zone of affordable residential settlement. The PMAY (Pradhan Mantri Awas Yojna) scheme of affordable housing has also stimulated the overall market demand.

The transaction of the properties in Rajarhat-New Town area are also taking right pace as the entire locality gradually upgrades its basic infrastructure, offerings of social amenities during last few quarters. Moreover, smooth connectivity and the proposed expansion of metro railway network to link the core city and other suburb areas give added feature for the ongoing and upcoming properties to attract potential buyers. Additionally, this satellite township continues to draw the attention of IT professionals due to its proximity to Salt Lake Sector V, the well-developed IT hub of Kolkata. Apart from its importance in terms of IT, New Town has also become hub of education, healthcare, hospitality and recreation.

The EM Bypass and adjoining neighbourhood have rapidly changed the skyline of the eastern fringe areas of the city during last decade and still continue to attract the hi-end buyers with the superior residential projects amidst greenery and excellent all-round transport connectivity. EM Bypass can be also regarded as the emerging lifeline of the city connecting the north and south seamlessly. The upcoming Garia-Airport Metro connectivity has also increased the demand of properties. The premium residential projects around the well-established posh localities in Kolkata like Alipore, Ballygunge and some selected south central city locations generate limited supply targeted for niche segment of citizens in Kolkata along with steady appreciation of property values backed by sufficient demand.

Howrah, the adjoining twin-city of Kolkata in the west, traditionally recognized as the industrial hinterland of Kolkata, is undergoing a speedy transformation into a residential destination and subsequently witnessed growing interest for housing as both demand and supply have increased over the period due to improvement of road infrastructure, under construction east-west metro railway linkage and easy connectivity options to the main business areas of Kolkata. The locations close to Vidyasagar setu, Kona expressway, Andul Road, Belgharia Expressway-Nibedita setu (the major connectors between Kolkata and NH2/Delhi Road & NH6/ Bombay Road) have gradually become hot picks for organized residential settlement.

The rental property transactions in Kolkata also witnessed a positive trends and value appreciation during the last few quarters in various sub-markets in Kolkata due to increasing demand for rental housing, mostly from the outstation workforce of the expanding IT/ITeS sector. The rental values saw steady growth in the past one year in some residential pockets of Kolkata. It is anticipated that the demand for rental homes from IT professionals, students, retailers and immigrants from across the eastern cities and other regions of India would push the rental values in micro pockets and this trend is expected to continue in the near future.
Service apartments, another relatively new concept, has picked up in Kolkata over the last few years. These are the ready-to-move-in flats that provide the occupant a fully-furnished unit along with optional facilities such as creche, chef, Wi-Fi connection and a 24x7 service kitchen. Enhanced volume of foreign tourists, frequent & prolonged business trips in the corporate sector and increased investor interest has made service apartments a sought after property segment in the city. It is expected to rise further, as the visitors/tourists now prefer to stay in these apartments over hotel rooms, due to their cost-effectiveness and for this reason the rental values for such properties have witnessed significant push in the last year.

As the matter of fact, these apartments create huge interest amongst the investors. The demand for rental apartments is primarily seen for 2 BHK units. Usually, IT professionals from other states and business travellers cover approximatel. 80% of demand for such apartments as tenants. Presently, Rajarhat and Salt Lake areas have the maximum supply for service apartments because of its proximity to Sector V, the IT hub of Kolkata and the international airport. The areas in south and central Kolkata such as Park Circus, adjacent locations of EM Bypass, Park Street, Ballygunge etc. also witness good demand due to their connectivity to the railway station and metro network.

n essence, Kolkata’s residential real estate market is experiencing huge growth and affordability, transparency and accountability are the core premises. ![fig1]( "fig1")