Kolkata, the capital of West Bengal, was formerly the capital of British India from 1772 – 1911. The city’s growth as an important commercial and industrial hub during the pre-independence period is rooted in its strategic location as a major port on India’s eastern coast. Kolkata is home to a diverse economic base, including heavy industries, food processing, textiles, etc. The city witnessed a decline in industrial activity between the 1950s and 1990s mainly due to geo-political tensions.
Planned satellite cities such as New Town and Salt Lake in the Kolkata Metropolitan Area (KMA), are emerging as prominent IT hubs.The international airport at Kolkata has connected it to global centres, attracting multinational and national tech giants such as Cognizant, Tata Consultancy Services (TCS) and Wipro, to the city. In addition to the current BRTS corridor, the metro rail has been proposed to improve the connectivity within the city.
With the increasing number of economic opportunities and burgeoning population, housing demand has largely been steady over the past few years. Supply had however, dwindled in recent years as West Bengal is the only state to launch its own version of the Real Estate Regulation Act (RERA), i.e., the Housing Industry Regulation Act (HIRA) (2017). The resultant confusion and latency in implementation of the Act are among the factors that had affected new supply in Kolkata. However, with the implementation of RERA since 2021, the residential activity has received a new quick start in the city.
The latest property market trends in the city suggest the following:
- In the July-September 2022 quarter, new supply grew 5 times, inching back to the pre-pandemic levels of 2019. The majority of new units (55 per cent) were launched in Rajarhat in Q3 2022.
- Maximum (44 per cent) units launched belonged to the INR 25-45 lakh price. The developer focus was on 2 BHK configurations, which took a 38 per cent share in the overall new supply, closely followed by 3 BHK, with a 31 per cent share.
- Residential sales in Kolkata registered a marginal drop of 5 per cent YoY as compared to the third quarter of 2021, with the micro-markets such as Rajarhat, New Town, and Barasat leading the demand.
- Most of the demand in Q3 2022 was concentrated in the INR 25-45 lakh price bracket, which took a share of 33 per cent in the overall sales tally.
- In terms of configuration, homebuyers in Kolkata preferred apartments with 2 BHK and 3 BHK configurations, which took 43 per cent and 41 per cent share, respectively, in the overall demand in Q3 2022. Our market insights suggest that homebuyers are increasingly looking for larger configurations in Kolkata, given the need for space amidst the hybrid working model.
- On the price front, the city registered a 7 per cent YoY growth – its highest since the beginning of the pandemic in March 2022.
- Kolkata takes the lowest share of 3 per cent in the total unsold stock of 7.85 lakh units in the top eight cities with an inventory overhang of 24 months in Q3 2022. The unsold inventory registered a 15 per cent YoY drop in July-September 2022 quarter as compared to Q3 2021.
