Housing starts slow down in Chennai, Bangalore & Kolkata

Housing starts in large cities such as Kolkata, Chennai and Bangalore have slowed down, according to the Housing Start-Up Index, a new indicator of housing construction, released by the Reserve Bank of India and the Ministry of Housing and Urban Poverty Alleviation (MHUPA) on Monday. However, in cities such as Ahmedabad, Bhopal and Hubli, housing starts have increased.

This index, first of its kind in India, provides an indication of how many building permits were issued in a given period, and how much of them were started and when.

An increase in the number of housing starts, as the report accompanying the release describes, indicates improvement in demand and investment. This index is critical for both property developers and policy-makers. So far, about six countries such as the United States and Japan had developed such an index. In the last few years, the RBI and the MHUPA have been trying to develop one for the country. Though , methods for developing it were recommended way back in 2009, the pilot study was taken up only recently.

The pilot study of 27 cities, which focussed on building permits issued between 2007 and 2011, shows that most of the construction started in the same quarter as the building permission was granted. The delay in commencing house construction at the most stretched to a year. The new data confirm that increasingly more multiple housing units (MHUs) are being constructed. The bulk of the building permission given in 27 cities pertains to MHUs.

The southern region witnessed high house starts in 2009, but slowed down in 2011. But, the western region showed a high start in 2011. The overall reduction in the construction activity in the country coincides with the low GDP growth between 2009 and 2010.

The RBI will publish the housing starts index every three years based on the data collected by the National Buildings Organisation and the National Sample Survey Office.

The government plans to extend the study to 300 cities, and develop the house start index for each of them.

Source: thehindu.com

Is this the right time to invest in property in Kolkata?

The doggedness of the end users to search for the perfect home is driving the real estate current scenario now. Inspite of the global economic meltdown, national meltdown, the end users of realty are still flocking the projects in search of a perfect home. This trend is very much visible and palpable in Kolkata also.

With this current trend in view, the real estate developers of Kolkata have shed their inhibitions of getting into low cost homes and are open now to invest in lands which are even beyond the boundary of the city of Kolkata.

Previously, this trend would have drawn much flak, as the middle class population had fewer options of commuting from the suburbs to the central business district of Kolkata. Not now anymore.

For the last decade, transportation and communication have improved in Kolkata like never before and is probably the only metro city, not only in India but in the entire world, which has the cheapest and several transportation options from any place within its precincts or even from the suburban areas.

The real estate economic growth only survives on the comfortability of all the classes of people in a society and what drive them are the infrastructure facilities.

So, when it comes to transportation and communication, Kolkata has surpassed all the other metros in India and has improved many folds, paving way for its real estate developers to even think of building homes in areas which are not very close to its city centers.

Hence, very good homes have mushroomed now in the various suburban areas of Kolkata, viz., BT Road (North), Chandpur Champahati (extreme East), Baruipur (South), Howrah (West), with affordable prices keeping in view the low land cost of those areas, various commuting facilities, economic crunch overall, giving a chance to anybody to invest in those areas.

So, this is probably the best time to invest in a Kolkata property. Not only because, the prices are low due to the above factors, also because even in an economic meltdown, property investments are always a safer option.

The prices and demands for realty never go down and that too in a metro city.

Also, in recent times, the Kolkata developers have followed the models of Mumbai, Chennai and Bangalore, and have come up with various offers for their properties namely offering free mid-sized cars to the first few buyers, modular kitchens and free Air-conditioners with flats which are difficult to sell due to their design patterns etc.

In this atmosphere, the highest number of buyers that Kolkata is getting is either from the NRI Indians or from people who reside in nearby cities who are making a safe bet here. The demand for home in Kolkata is increasing as a result.

The developers have seen in the past few months, that if the product mix is right which means that the location of the property, its design, its facilities and amenities are good, then any project in Kolkata wherever it is being developed, is getting a steady flow of buyers all around the year.

Hence, as stated above also, if you want to invest in a property and you don’t have a city preference or your investment instincts are driven by the market scenario and not by sentiments, Kolkata is the ideal destination.

It has improved infrastructure, low prices, steady flow of transactions all the time and opportunities galore to re-sell a property at a better price sometime in the future.
This is indeed, the right time and place to invest. Kolkata is awaiting many more deals in near future too. Probably, the pre-Puja (festivities) times of August and September will herald many more investors from different parts of this country and also abroad as the best time is the current time.

Source: moneycontrol.com

2 BHK Flats in Kolkata

The residential real estate market in Kolkata is mainly end-user driven and has been less volatile as compared to other major cities in India. Majority of the demand in the residential market is in the affordable and the mid segment. During the first three quarters of 2012, approximately 7,600 units were launched in Kolkata, with most of the projects in the price bracket of Rs 3,000 to Rs 5,000 per sq ft. The new launches were concentrated in the peripheral locations due to affordable rates and availability of large land parcels. Despite steady demand from affordable and mid segment, the city is likely to witness stable capital values in the short term on account of high mortgage rates and rising inflation in the market. Buyers have been deferring their buying decision in the hope of a correction in property prices and brighter job markets.

What is the scenario in the eastern fringe of the city, that is, the areas of Salt Lake, Rajarhat etc?

Major activity in terms of planned residential and commercial development has taken place in the eastern micro-markets along the EM Bypass. Sector V, Salt Lake being a hub for IT/ ITeS sector, witnesses demand primarily from mid and high-income home buyers. During the first nine months of 2012, capital values in Salt Lake remained stable. However, with the ongoing discussions over legalising sale of leasehold residential plots, capital values are expected to appreciate.

Rajarhat is also a hub of real estate developments with major residential projects under construction by national developers. The location continues to witness high demand from mid and high-end segments.

However, due to the slow pace of infrastructure development most of the under construction projects have been delayed in this micro market. Capital values remained stable during the first three quarters of 2012.

There is a lot of emphasis on mid-segment housing in the area, are houses at Rajarhat still really that affordable?

Rajarhat is expected to become the second IT hub of Kolkata in the next few years. Average capital values for high-end projects in Rajarhat are approximately Rs 3,000 – Rs 4,500 per sq ft, while for mid-range properties, the price range is between Rs 2,400- Rs 3,000 per sq ft. These values are on a lower side as compared to the other micro markets within the city where average capital values are in the range of Rs 4,500- Rs 18,000 per sq ft (high-end) and Rs 2,800 – Rs 5,500 (mid-end) per sq ft. Recently, a number of affordable projects have been announced in the adjoining areas of New Town like Kali Park, Raighachi and Kalikapur areas falling under Rajarhat mouza. Developed by local developers, these projects are priced between Rs 2,100 to Rs 3,600 per sq ft. Rental values in Rajarhat are approximately Rs 25,000 to Rs 35,000 per month for mid segment projects, whereas for high-end projects the range is Rs 45,000 and Rs 65,000 a month.

Source: The Economic Times

Houses & flats for sale in Kolkata – Kolkata Classifieds – Liyans.com

Despite the negative sentiment surrounding West Bengal’s image, property prices in Kolkata have continued to escalate.

Defying the national trend, residential real estate prices have appreciated between 20 and 30 per cent in the last two years, say realtors. However, the high returns are not on account of a booming real estate market in the state, but the lack of new projects in the city and its fringes. As a consequence, prices of existing properties have risen, almost disproportionately.

After, Durgapur, no new planned city has come up near Kolkata over the last decade. Even plans to develop satellite townships in areas like Bariupur in the southern fringes of the city has failed to take off. Suburbs in West Bengal continue to be victim of poor infrastructure and connectivity.

Notably, unlike tier I cities like Delhi and Mumbai, Kolkata real estate market caters to end-user buyers, rather than speculative investors. The ticket size of the investment is also low, between Rs 2 crore to 5 crore, compared to Rs 10-15 crore in other Tier I cities.

“The slowdown the real estate market is linked to the general economic slowdown, rather than local issues. In the medium and long term, the investment perspective in Kolkata is fairly good. The price escalation is mainly in prime locations. The supply is limited, and in good locations the land holding is small, which has resulted in steep rise in prices,” said Harshavardhan Neotia, Chairman, Ambuja Realty Group.

“In the short and medium term, some projects in Kolkata have given up to 30 per cent return to investors, which is much better than other cities. ” said Jitendra Khiatan of Pioneer Properties.

Yet, not many consider investing in Kolkata. The reason is negative sentiments linked with the business environment in the city, he said.

Some of the areas where investors got good return include prime locations like E M Bypass, Salt Lake, Garia, where property prices recently escalated in anticipation of Metro linkages.

A major reason for the unrealistic land prices is linked to government policy.

Land prices have gone up by more than 50 per cent in many plush localities, as demand remains steady and hardly any new townships have come up in urban and semi-urban areas in city fringes.

The recent land auction by government bodies like Kolkata Municipal Corporation (KMC) and Housing Infrastructure and Development Corporation (Hidco) give a fair idea of the burgeoning land prices in the city. In June this year, KMC sold a 2-acre plot on EM Bypass for Rs 115 crore, making it the biggest land deal in the city so far. The last big land deal was in 2009, when a 3.35-acre plot on EM Bypass sold for Rs 135 crore. More recently, in the IT township of Rajarhat, a 2.5-acre plot for a retail-cum-office complex fetched Rs 51.13 crore for Hidco.

“The value of land has gone up by around 50 per cent in Kolkata, the impact of which will be reflected in the upcoming project. The land supply is reducing, but the demand remains steady and there are hardly any new townships coming up to meet the demand,” said Santosh Rungta, a city-based realtor.

Yet high land land prices in West Bengal is not exactly new. Around 2009, in the earlier Left Front regime, government agencies made windfall gains by selling land in prime locations.

For example, three prominent government agencies involved in land deals in and around Kolkata — the Kolkata Metropolitan Development Authority (KMDA), Kolkata Municipal Corporation and West Bengal Housing Board– signed deals worth more thanRs 18,000 crore, for over 5,250 acres of land during the period in little over two years. In fact, KMDA was credited with signing deals, worth more thanRs 800 crore with real estate developers on a single day.

One of the biggest hurdles in developing new townships in West Bengal is the the Urban Land (Ceiling and Regulation) Act (ULCA), 1976. According to the Act, the ceiling limit on vacant land in a category ‘A’ city like Kolkata is 7.5 cottah or about 500 square meters.

West Bengal is one of the few states in the country to have a legislation like the ULCA. The move is in sync with the apprehensions of the chief minister. After all, Banerjee had once wondered, “What will happen if someone wants to buy the city?”

The demand for repealing the ULCA was raised for the first time by Godrej Properties chairman Adi Godrej, at an industry meet within the first month of Banerjee taking over as the chief minister.However, much to the disappointment of the developers, urban development minister Firhad Hakim has recently ruled out the possibility of repealing the Act.

“We are not going to abolish the Land Ceiling Act,” he said. “Instead, we will give permission to developers for purchase of land beyond ceiling, provided they reserve 30 per cent housing for low-income housing segment.”

Source: Business Standard

Cheapest Flats in Kolkata

Kolkata, situated on the east bank of the river Hooghly, is the capital of West Bengal. Also known as “City of Joy”, Kolkata is believed to be one of the cheapest cities in India.

The city is showing mark improvement in every sector with the largest in its property market. With an increasing demand for commercial as well as residential property, Kolkatta real estate is once again coming back into the active mode.

With a multitude of multinational companies entering here, there has been a sudden increase in the number of potential developers of upmarket property. As maintaining the global standard of living, most famed conglomerates are ready to spend extra amount to avail the facilities that are at par with international standards.

Also, many reputed builders are looking forward to develop a number of buildings in the city. A large portion of demand for property in Kolkata seems to come in from the domestic and international retail chains to set an upward trend in the commercial market. As prophesied by the real estate soothsayers, Kolkatta will certainly see a tremendous rise in demand for office spaces in approaching years.

Source: Indian Realty News