Kolkata Realty Report Jul-Sept 2017

Do you want to buy flats in Kolkata? Here is the Kolkata property market insight from July to September to have an overview of the current situation.

Recovery of real estate sector

The mission is yet again unaccomplished as West Bengal government has still not notified respective RERA norms. It has just tabled the draft before the cabinet; neither the government has appointed a related authority yet which resulted in languid market sentiment.

Advanced tax collection

Unitary Area Assessment (UAA) is another much-spoken topic by KMC after the RERA implementation. It’s basically an online tax calculation and tax submission which can be performed by the property owners of the city. Reportedly it’s still stuck in IT glitch. This move will improve the tax collection index of the city.

Removal of unsafe constructions to create aggressive demand

The KMC is yet to form a special committee to find solution and final treatment to the unsafe buildings of the city. This committee will be set up in ward to ward basis and will be headed by the local chairperson. So, in the coming days redevelopment works are likely to happen around the city.

Allotted yet unused plots are under the magnifier

Allotted plots, with the nonappearance of any construction work would be liable for abandonment by the Housing Infrastructure Department Corporation (HIDCO) through expediting land parcel for further realty construction.

Infrastructural growth

Development of infrastructure gained a huge push with an investment of Rs. 12,180 crore allocated for roads, power and water supply projects. As of now 12 road projects in Kolkata, including 6 flyovers and an elevated corridor have been thought to receive a chunk of this investment.

Price graph among the important micro-markets

Locality    Avg. ‘Ask’ Rate (per sq ft) QoQ change YoY change
Baguihati 2500-3200 -6% -6%
Keshtopur 3200-4000 1% 1%
New Town  4600-5300 -5% 0%
Rajarhat 3550-4000 3% 1%
Dum Dum 2900-3600 -2% 1%
Behala 3200-4000 -1% -1%
Jadavpur 4000-5300 -3%       -4%
Garia 3200-3800 -6% -2%
Tollygunge 4000-4800 2% 2%
Sodepur 2700-3100 1% 6%


Locality Jul-Sep 2017 % Change Locality Jul-Sep 2017 % Change
Action Area I 4900 0 Action Area I 15 0
Agarpara 2600 4 Baguihati 11 5
Alipore 12700 -1 Ballygunge 29 2
Baguihati 3200 -6 Bansdroni 14 4
Ballygunge 11900 1 Behala 13 4
Bansdroni 3750 3 Chinar Park 12 9
Barasat 2300 5 Dum Dum 13 9
Behala 3650 -1 Garia 13 -7
Behala Chowrasta 3550 0 Gariahat 27 4
Belgharia 3150 -2 Jadavpur 16 0
Bhawanipore 9100 -4 Jodhpur Park 20 5
Chinar Park 4600 4 Kaikhali 12 4
Dum Dum 3275 -2 Kalikapur 14 8
Garia 3725 -6 Kasba 17 3
Jessore Road 4175 1 Kestopur 11 0
Jodhpur Park 7550 -4 Lake Gardens 18 3
Joka 3250 5 Madhyamgram 9 -5
Kestopur 3325 1 Naktala 14 4
Narendrapur 3600 1 Narendrapur 11 0
Netaji Nagar 3750 -6 New Alipore 21 0
New Alipore 6870 1 New Town 14 0
New Garia 3500 -3 Patuli 13 -4
New Town 4850 -5 Prince Anwar Shah Rd. 28 14
Park Circus 5950 -2 Rajarhat 13 0
Picnic Garden 4650 3 Salt Lake 17 0
Prince Anwar Shah Rd. 10085 -4 Santoshpur 13 8
Prince Anwar Shah Road Connector 5000 -1 Southern Avenue 27 4
Rajarhat 4500 3 Tollygunge 18 3
Salt Lake 5775 -1 VIP Road 13 -4
Santoshpur 4200 1
Sodepur 3125 1
Southern Avenue 10075 2
Tollygunge 4800 2
Uttarpara 2800 -5
VIP Road 4400 -4

What our experts say

Residential market demand in Kolkata is favourable towards compact, affordable housing apartments with modern facilities and off course relatively congested areas. BT Road, Chinar Park, Dunlop and Salt Lake are the new emerging hotspots of residential investment. Implementation GST will bring clarity in real estate tax index. Above all, will RERA implementation market is expected to get better in coming days. Market will witness a major upswing in coming one year. Property in north Kolkata has been the most popular choice of investment throughout the year. On the back of metro connectivity Joka, Barasat and Agarpara are one of those potential growth areas to be mentioned. Affordable housing contributed steadily in the sales volume.

News of rental market

Price Answar Shah Road area witnessed 14% advanced demand on YoY basis. Airport peripheral areas have annual 9% high ‘ask’ rate in areas like Chinar Park and Dum Dum. Santoshpur, Kalikapur and other few areas of EM Bypass connectivity gained 8% growth in rental values.

Demand: Supply

Despite restricted new launches availability of the houses counterbalanced the popularity parameter by 10%. This inconsistency prevailed in all demand categories. While affordable housing segment received a steady market demand, the digits of demand and supply in luxury residential category yet again failed to impress the sale.

LNN (Liyans News Network)

Why Transferring Home Loans Appears Problematic To Homebuyers?

Transferring home loan from one bank to another for better facilities and lower interest rates is attractive option for existing home loan borrowers. However, this entire process of transferring includes several charges and suits that the applicant should be aware of. Unsatisfied loan borrowers generally opt for this switching. Usually they have a ‘plan-B’, in case they are not happy with their existing banking services, besides the dearth in services and inflexible renegotiation terms of the lender such as – changing the tenure or reworking the EMI, also influence a buyer to shift their ongoing loan repayment tenure to any other lender with better facilities.

Previously, banks wouldn’t allow home loan interest rate cuts to the existing borrowers. Passing on the same benefit will definitely benefit the customers with better loan savings during repayment tenure. If banks make it happen, then transferring home loans will be benign.

In your home loan tenure you actually end up paying greater amount in installment more than the actual purchased price of the property. In case you decide you renovate the property within this due period, in most of the cases getting a renovation loan becomes tough as most of the lenders don’t grant an increased loan amount for this purpose. Generally under these circumstances borrowers tend to transfer the loan cycle to another bank with better services and go through several complicated processes.

Tiresome process
For transferring home loan at first the borrower has to submit application to the existing lender. Then the bank will provide the consent letter or the NOC along with the details of the outstanding amount. All these documents are needed to be served before the other bank in which the borrower wants to shift the loan.

The other bank will process it as a fresh loan approval request and process the documentation accordingly. The documentation process includes submission of the employer’s letter, salary slip, photo ID proof, bank statement etc. That means one has to redo the process from the very beginning. Transferring home loan requires thorough documentation, coordination and following up. There will be problems, if the existing loan is jointly taken or the income levels have declined. Being irregular in paying EMIs can cause application rejection too. After total satisfaction of documentation the new bank will approve the application and will ask the previous bank to close the existing account.

Hanging risk involvement for the new bank
Once the transaction is completed and the property papers are handed over to the new bank, then the remaining post-dated cheques or ECS get cancelled. The new bank then runs an open-ended risk because the existing bank releases the mortgaged documents of the property only after receiving the payment. The bank takes such risk just to grab new customers. As the new bank treats this application as a fresh loan approval process, therefore it asks the borrowers to pay the processing fee, stamp duty, notarisation charges and franking charges which is equivalent to 0.5%- 1% of the loan amount.

An indefinite process
A home loan transfer process doesn’t have any property route. No actions can be taken legally against the bank, if it doesn’t allow for the transfer. Thus, mostly borrowers prefer to stick to their existing borrower to avoid further litigations.

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This Diwali To Witness Much Stabilized Market in Mumbai

Post demonetization sale hadn’t gone up as predicted. Additionally, the implementation of RERA is still stuck in the centre and state level swing. Market experts predicted that the festive season only has the capacity to show some sale to the lagged market standing. Both the developers and the buyers wait for the festive season to avail maximum investment benefits. The market is currently having transaction over ready-to-move OC ready possessions which appear to be a much needed backing for the financially-hit sector.
Developers are hoping that Diwali will bring a positive drive to the market along with much needed stability. Ready-to-move properties will be gearing this drive on, as there is no GST charge levied on it and buyers will just have to pay less against their real estate purchase options. As of now, this year’s Diwali has been the greatest season of sale throughout the year.

The National Real Estate Development Council (NAREDCO) after analyzing the current market situation of real estate indicating towards Diwali for the big-time market recovery. During the last Diwali the industry had some real high-score selling as it was the best selling month of that year in real estate. This year, however the sale was not really promising. With the abrupt demonetization hit, RERA and GST implementation still market is doing sensibly from the developers’ standpoint. Most of the enquiries that they are getting are for the ready-to-move apartments which don’t attract any additional tax burden alike the under construction ones. So there is a good volume of demand and on-hand projects are selling up fast. By far Mumbai has registered 13000 projects during this pre-Diwali season.

Speaking on this new selling trend Niranjan Hiranandani the national president of NAREDCO, revealed that the impact of recent events will certainly be there in the pattern and volume of the total sale and new project supplies but the sector won’t have to undergo this for much longer now. The entire economical market of the currently is figuring the way out to get back on track post demonetization blow. With the selling inquiries coming up, the sector seems to have been gaining its bygone trust-factor with couple of the biggest reforms till date; else buyers wouldn’t have returned to this sector within this limited epoch. This definitely suggests that the market has had enough of these policy changes and it’s already there on the track of progress.

Studies also pointed out there is a huge market pull deriving from the affordable housing sector as well. Even big developers are associating with the affordable housing projects to get incentivize under current financial plan and governmental subsidies. Developers are attracting buyers with many lucrative offers apart from 20:80 payment scheme, to invest in their projects.

“Banks and financial institutions are offering home loans at historical low interest rates, and various positives, including interest subventions scheme for affordable home buying will boost sentiment this festive season. This should impact indecisive fence sitters and we should see them make the buy decision, provided that the market sentiments are conducive for home buying in the festival season that is upon us already. I expect residential real estate sales to improve in this festive season, I expect fence sitters to step forward and make their home buying decision.’’-said Hiranandani.

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500 Flat Buyers In Mumbai Fear Losing Millions After Projects By Two Diamond Traders Got Into Trouble

FIR issued against two diamond traders of Mumbai Dahyabhai Sutaria and Bhupat Lukhi and their partner Sangeeta Hegde, after a hi-end project in Mira Road gets suspended. Approximately 500 people, who had paid up to 85% advance money for the project in Mira Road, are in dilemma of neither getting the possession nor the money back as construction process was stopped over the last four years.

Last hope of these affected buyers is in the hand of Thane Police now, which are in command of the investigation, taking over from Kashimaira Police. Reportedly, Thane Police filed a first information report against realty firm Kashimira Ceramic Products LLP, run by diamond traders Dahyabhai Sutaria and Bhupat Lukhi, advocate Vijaykumar Hegde, and his wife Sangeeta Hegde who are also the administrative bodies of another realty house called Tanvi Constructions. The FIR is consisting names of Sutaria, Lukhi, and Sangeeta but not Hegde, who said he was the non-executive director of realty firm Tanvi Construction.
The complaints of the suffering flats buyers revealed that Kashimira Ceramic launched in 2010 was one of the biggest projects in the suburbs- the 22-storey Tanvi Eminence Phase I & II in Kashimara, Meera Road (E). The project was supposed to deliver 400 flats of one and two-bhk in Phase- I in 2013 and in Phase-II there were 250 flats to be delivered in 2014.

The project was stalled in 2013; till that time the construction work had completed till the 10th floor in Phase- I and there was no introduction of Phase-II, according to the complaint filed by the flat buyers. Once they had realized that they had been “cheated”, they held quite a few meetings with the builders and during each and every meeting the builders only gave nothing but high assurance for keeping their expectations alive. One of the buyers claimed that she had paid Rs. 35 lac long back in 2012 for 2-bhk allotment, which was of 58 lac cost.

She said, “First the builders told us they had run into problems with environment department because the project was in the vicinity of the Sanjay Gandhi National Park. Then we found that the builders had a problem among themselves and one of them had filed a case against his partners.”
Another home buyer claimed that he purchased a flat in 14th floor of Phase-I. Now he is living in a 350bhk apartment in Borivali with is ailed mother. He borrowed Rs. 5 lac as home loan to pay 24 lac advance amount and he sees no chance of the project completion in near future.
The flat buyers have also written to the Chief Minister’s Office and regulatory authority (RA) MahaRera seeking complete justice. The flat buyers have also claimed that the builders, while getting their project registered with MahaRera as per the guidelines, disclosed 2021 as project completion timeline.

Another report published in Mumbai daily claimed that both of the diamond merchants’ bank account has been seized for quite some time now. Despite several attempts Sutaria remained inaccessible. Both Sutaria and Lukhi reserved 150 flats in Mumbai for their friend circle in diamond business. They collected the advance amount from the homebuyers and stalled the project. On the other hand Sangeeta reportedly claimed that her name has been intentionally dragged into this mess and her construction company has nothing to do with this project.

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West Bengal: Revised Real Estate Act To Standardize Business

RERA implementation in West Bengal is struck dumb after the drafting completed on Aug 16. It seems like overruling the deadline and penalty panic hardly have any impact on the execution stroll of the state. A month is over after the introduction of West Bengal Housing Industries Regulation Bill, 2017 in the assembly; still, the Real Estate Regulatory Authority is not formed in Bengal. Reportedly, it will get constituted within coming couple of the months.

West Bengal Housing bill suggests that for all ongoing projects, for which the completion certificate has not been issued, the developer should make an application to the Housing Industry Regulatory Authority (HIRA) within a period of three months, from the date of rollout of the Act. It was also asserted that government will take strict action against those builders for filling up wetlands and ponds for the development purpose. Once the Act gets notified by the Bengal government, all residential projects above 500 sq metres/ with eight apartments, have to be registered with the state regulator HIRA.

“People who are looking to buy property in Kolkata will have to hold their purchase decision for some more time till the registration process of real estate stakeholders and projects successfully completes. A series of project dispensing is on halt due to the tardy restoration process of the central Act,’’- said Mr. Mahesh Somani, Head- East Zone, National Association of Realtors India (NAR).

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RERA mandates registration of builders, realtors and realty projects. Without RERA registration number a project can’t be even on the display. Registration process only can be started after the formation of the state RA (Regulatory Authority). That reminds, West Bengal realty industry has to wait for another couple of months for the registration process commencement. Real Estate sale in Kolkata is already low-hanging after demonetization blow. Additionally, GST has computed hefty tax burden on the under-construction projects for the end-users. Over and above state’s delay in RERA implementation is further influencing pessimistic investment sentiment in realty.

Apparently, after the outset of the registration process real estate industry of West Bengal will need at least a year to be accustomed to the new set of law on the back of registration fruition. Looks like the watchdog of Indian realty RERA Act has been victimized by the inferior state infrastructure. This has hit the housing loan companies directly as buyers are in no mood for long-term asset investment.

However, the Act will ensure that developers adhere to the delivery schedule and uphold their commitment. Unscrupulous promoters or realtors will be kicked out of the market in order to provide improved and transparent consumer support. The Act will steer orderliness in the real estate sector and build benevolence among buyers.

LNN (Liyans News Network)