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Greater Kolkata registers sales of 3,280 residential units in April 2022: Knight Frank India

Knight Frank India, country’s leading real estate consultancy, in its latest assessment noted the registration of 3,280 apartment sale documents in Greater Kolkata in April 2022. The city has seen sales of 11,961 properties since the onset of the year. Residential property registrations moderated in April 2022, recording a 30% MoM degrowth. Home buyers remained cautious of decision-making, due to the price hike, noticeable in the total registration count of sale documents in this month. Since the introduction of the stamp duty rebate in July 2021, 36,912 homes have been registered in Greater Kolkata till April 2022. Compared to the corresponding previous period of July 2020 to April 2021, the latest 10-month period noted an 8% annual uptick in new sales registrations. Captured for all residential sales documents registered with flat/apartment sizes mentioned, the registration data encompassed transactions in both primary and the secondary markets.

Table 1: Monthly Residential Sales Deeds Registered: July 2021 – March 2022

 

Total Number of Residential Sales Deeds Registered*

In Greater Kolkata

 MoM trend

January 2021

3,553

 –

February 2021

4,595

 29%

March 2021

5,465

 19%

April 2021

3,673

 -33%

May 2021

1,281

 -65%

June 2021

1,422

 11%

July 2021

2,998

 111%

August 2021

7,316

 144%

September 2021

4,846

 -34%

October 2021

4,683

 -3%

November 2021

1,140

 -76%

December 2021

3,968

  248%

January 2022

2,391

 -40%

February 2022

1,593

 -33%

March 2022

4,697

  195%

April 2022

3,280

 -30%


Source: Directorate of Registrations and Stamps Revenue, Government of West Bengal; Knight Frank India Research

*Includes all types of apartment sales documents registered with flat/apartment sizes captured at the time of registration of the property   

 

Table 2: Residential Sales Deeds Registered: July 2020 – April 2022 vs. July 2021 – April 2022

 

Total Number of Residential Sales Deeds Registered*

In Greater Kolkata

 YoY change

July 2020 to April 2021

34,089

 –

July 2021 to April 2022

36,912

 8%


Source: Directorate of Registrations and Stamps Revenue, Government of West Bengal; Knight Frank India Research

*Includes all types of apartment sales documents registered with flat/apartment sizes captured at the time of registration of the property   

 

Table 3: Apartment Size Analysis Comparison

Year

0 – 46 sq m (0-500 sq ft)

47 – 92 sq m (501-1000 sq ft)

More than 93 sq m (more than 1001 sq ft)

April 2022

874

1,550

856

% Of total sales

27%

47%

26%

Source: Knight Frank India Research

The pandemic has shifted home buyers’ preferences from compact sizes to bigger units, a trend that continues to play out in the residential real estate market. This is also a major reason for slowdown in the launches of compact sized units over the past one year. Of the various configurations, homes in the range of 501-1,000 sq ft continued to account for the highest share of 47% of the total registrations in April 2022. The remaining configurations, of apartments up to 500 sq ft as well as unit sizes of 1,001 sq ft and above, comprised a 27% and 26% share each in the total registration pie.

Figure 1: Micro-market share by Percentage – April 2021 and April 2022

        

Source: Knight Frank India Research

North, South and West remained the top three best performing zones in terms of home sales in April 2022. North Zone expanded from 29% of the total in April 2021 to 40% in April 2022 as peripheral locations in this zone gained a lot of traction from homebuyers. At 31%, South Zone remained largely stagnant compared to the previous year. Residential products in the ticket size bracket of INR 40 to 80 lakhs remained the most preferred category across the city. West Zone, however, saw a decline from 18% in April 2021 to 15% in April 2022.

In a monetary policy committee meeting earlier in May 2022, the Reserve Bank of India (RBI) has increased the repo rate by 40 basis points to 4.4%. With upward pressure on home loan interest rates and hike in product price, this will adversely impact housing affordability in the near term.

 

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “The 10 months post July 2021, when stamp duty was introduced, has seen an 8% growth in residential sales registrations, compared to the corresponding period of July 2020 to April 2021. Further, the stamp duty benefit will remain for another 5 months (till September 30, 2022) which will be encouraging in a market faced with pressures of inflation and hikes in home loan rates. This rebate should have a positive impact on the city’s real estate activities, providing relief to homebuyers. We hope that the government will continue its favourable stance towards home buyers in the future, ensuring the current momentum is maintained.”   

 

Sushil Mohta, Chairman, Merlin Group and President, Credai West Bengal  on the Knight Frank report said,“Considering the fact that since last July,21, there was a stamp duty reduction by 2% and circle rate reduction by 10%, a lot of transactions happened. Both buyers and sellers taking advantage of these reduced rates conclude the transactions and many deals took place. Therefore April month starting with 3,280 odd units in Kolkata is satisfactory.  Overall 11961  units transaction happened in Kolkata this year so far,  which is also satisfactory. There has been a price increase in the last 3 months due to an increase in construction costs. If this price increase was not there, we could have seen more transactions. At least 20% more.  But developers were forced to increase the price because of the increase in input cost of cement, copper, aluminum, and many other raw materials. Moreover now with the increase in home loan rate, there may be a temporary setback for a month or so in sales. But that will not last for a long time unless further increases happen.  I would say that the sales should remain good during this year and I also predict that the construction area rate may increase 5 to 10% further due to the increased cost of construction,” said Sushil Mohta, President, Credai West Bengal and Chairman, Merlin Group.

“I am also expecting repo rate to increase further in addition to whatever has happened- by 0.40 percentage point. It may go in total up to 1 or 1.25 percentage point during this financial year. The overall home loan rate will be around 8% now which can go up to 8.75% if the repo rate further increases which can be a possibility”, added Mr. Mohta.

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