The housing market in Kolkata has undergone a significant change, marked by substantial growth and changing dynamics. Traditional housing arrangements have given way to modern trends, the transformation driven largely by improvements in infrastructure and economic advancements, leading to the rapid expansion of urban areas. As a result, previously considered outskirts are now becoming sought-after residential areas in the city. Moreover, increased income levels, enhanced transportation links, and a rise in commercial ventures have led to a growing need for diverse housing options that cater to the varied preferences and aspirations of Kolkata’s inhabitants.
A Recap of the Residential Market in the Previous Year
In 2023, the residential real estate market in Kolkata experienced significant shifts, reflecting in both supply and demand dynamics.
One of the most notable trends was the substantial growth in new supply – the launch of 15,303 units recording an impressive 87 percent year-on-year growth, signifying a proactive response from developers to meet the increasing demand for housing in the city.
Among the various localities in the city, New Town, Howrah, and Rajarhat emerged as the focal points for new residential developments, witnessing the maximum number of unit launches.
On the demand side, residential sales experienced a healthy growth of 16 percent year-on-year, with 12,515 units being sold in 2023. Specific localities such as New Town, Rajarhat, Baranagar, Dankuni, and Joka emerged as the hotspots for residential sales in 2023. This indicates a clear preference among homebuyers for areas that offer a mix of amenities, connectivity, and liveability factors.
In terms of price preferences, homes within the price range of INR 25-45 lakh dominated the demand landscape, commanding a significant 38 percent share.
This suggests a strong demand from middle-income homebuyers who are seeking affordable yet quality housing options in Kolkata. Both 2 BHK and 3 BHK configurations were highly favoured by homebuyers, capturing 43 percent and 42 percent shares respectively, of the total sales, showcasing a balanced preference among homebuyers for both compact and spacious living spaces.
Mixed Trends in Residential Sales in the First Quarter of 2024
In Q1 2024, residential sales in Kolkata totalled 3,860 units, marking a significant annual growth of 73%. This reflects a notable improvement in market conditions and demand levels compared to the same period the previous year. However, when compared to Q4 2023, there was a quarter-on-quarter decline of 19%, suggesting a slight contraction in sales activity.
While this decline may indicate a seasonal slowdown or short-term fluctuations in market dynamics, the overall trend remains positive when viewed in the context of year-on-year growth. Despite the quarterly dip, the substantial increase in sales compared to Q1 2023 underscores the resilience and potential of the Kolkata residential market, indicating a sustained upward trajectory in the long run.
New Supply Takes a Dip
Kolkata's new supply in Q1 2024 amounted to 1,490 residential units, depicting a substantial year-on-year decrease of 45%. Compared to Q4 2023, there was a steeper quarter-on-quarter decline of 72%, indicating a significant slowdown in development activity within just one quarter.
This sharp decline in new supply indicates a notable contraction in the market, implying potential challenges or constraints faced by developers in bringing new projects to the market during this period, or shifts in developer strategies.
Summing Up
The residential market trends in Kolkata in the first quarter of 2024 reflect a dynamic landscape characterized by continued sales activity, and evolving preferences among homebuyers. However, with data highlighting a challenging new supply situation in Kolkata during Q1 2024, characterized by significant declines both sequentially and year-over-year, this may have implications for the future dynamics of the residential market in the city, including potential effects on pricing, inventory levels, and market competitiveness.
