property in kolkata | Kolkata Real Estate | Kolkata Property

Is the Real Estate Bubble Big Enough to Naturally Burst in 2014?

Political uncertainty, liquidity issues, high interest rates and cautious sentiments are expected to underpin the real estate sector during the year.

One of the primary concerns for the real estate sector in the coming year is very clearly this: Will the much talked-about asset bubble inflate further or will it burst?

2013 was mired in existing challenges such as subdued sales, piles of unsold inventory and builders going bankrupt. These problems will continue in 2014 as well, and, given economic instability, matters could become worse. However, it is very difficult to forecast anything in India as the real estate market is not subject to a fixed pattern. A great degree of political uncertainty, liquidity issues, high interest rates and cautious sentiments are expected to underpin the real estate sector in 2014 too. The only positive energy in this sluggish sector springs from the fact that the sales, though slow, are not stagnant.

India’s real estate kolkata market has been faltering for quite some time as the economy remains under stress. Realty prices have been surging in an unprecedented manner unlike income levels which are not rising. The price increase is mostly speculative and can be attributed to the predominantly capital-driven nature of the sector.

It is an established fact that the real estate bubble in the developed world is a creation of the central banks strategy of keeping interest rates at a very low level. This excess money has also trickled into the real estate markets of emerging economies as overseas investors began to look for alternate investment avenues.

While the cause might be the same at home, the movement of capital across the various geographies in India needs serious analysis. Let us look at each of the significant markets to understand the creation of the asset bubble.

The MMR (Mumbai Metropolitan Region) market has a characteristic of its own (see MMR graph). There is huge latent demand but exorbitant prices make property unaffordable for most buyers. The price level here is way above the average price level of India but the annual acceleration is not very steep; in fact, it has been almost stagnant for quite some time. The realty cycle in MMR follows a long drawn pattern and has a low theta (angle of correction). The graph illustrates that the annual price growth post the 2008 meltdown touched 48 percent owing to substantial money coming into the MMR markets and then, after peaking at 54 percent in the second quarter of financial year (FY) 2010-11, the bubble started deflating.

After that, the MMR market with sky-high price levels and declining sales velocity was considered an unproductive arena and the funds inflow reduced. By sales velocity, we mean the ratio between monthly sales and total supply. The price rise after this, though persistent, has been comparatively slow. It is also interesting to note that even after a slow growth rate of prices, the pace of offtake has been slowing.

NCR (National Capital Region, which includes New Delhi), on the other hand, is an entirely investor-driven market. A lot of property in kolkata is being sold in sectors which may remain uninhabitable for a long time. The price rise post FY 2010-11 continued to be sharp and persists even today. After touching the threshold of 27 percent year-on-year in the second quarter of FY 2012-13, the growth rate has started to peter out. One can already see the correction in the secondary market in NCR. The situation indicates that the existing bubble in tier-I markets like NCR and MMR are at the threshold of bursting. Owing to the high level of unsold stock in these markets, the prices might soon begin to tip off.

Source: forbesindia.com

How are apartments in South Kolkata raising the luxury meter?

South Kolkata is considered by many as a favourite residential place. Hence one can find several flats for sale as well as luxury apartments here.

South Kolkata, being the commercial hub of the ‘City of Joy’, is also hot favourite as the residential area. With too many offices in this part of the city, people wish to have their homes nearby so that journey to their office becomes easy.

With more and more offices being set up, the real estate scenario of South Kolkata has changed a lot than what it used to be ten years back. If you are an outsider and want to settle down in this part of Kolkata, a newspaper or a broker will help you get good flats which are for sale in South Kolkata. You may choose a flat according to your requirement and budget. In some cases, these flats are second hand, sometimes they are grand new. Many people, who are in need of money, give up their individual houses to contractors for construction of flats. They themselves get a flat in that apartment and also get lump sum of money from the contractor as a price for the land. The flats which are for sale in South Kolkata have their price tag fixed according to their location, facility and of course luxury meter. The second hand flats are comparatively less costly than the new ones.

A number of posh apartments have come up in different parts of South Kolkata. There are several apartments in South Kolkata which have really increased the luxury meter of Kolkata lifestyle. The South city apartments, the upcoming Hiland Greens, the Eden City, and Riverside are all super posh apartments in South Kolkata.

Which are the real estate hotspots in the City of Joy?

Having a residential apartment in Kolkata is a sheer delight no doubt.The emerging locals like Garia are the hotspots in the city in terms of generating high return on investment in form of rental incomes from the property.

The Kolkatans have much to cheer on their real estate investments. Garia is a place which is yielding bountiful returns from the real estate properties in terms of the income generated from them as rentals. It can be well assumed that if you have a residential apartment in Kolkata standing in Garia or the adjacent areas then you will surely reap handsome revenue from it. Say, you have invested about 45 lakhs on the property then you can easily look forward about earning an amount ranging from 15K-30K/month. According to the recent records a 2-3 BHK apartment in Garia would cost about 20-50 lakhs, while lowest cost of a 2BHK is about 20 lakhs and the minimum range for a 3 BHK would be 30 lakhs approximately.

Having a property anywhere in and around the city always have its own set of advantages. If you have a property in north kolkata or South Kolkata, both way you are at gain but there are certain specific locations. As we have been discussing that having a property in Garia has its own benefits. A 2 room apartment might offer rent of about 15-25k per month and in case it is a 2 bhk one then the rent will start somewhere at 20K and hence one can actually guess what will be the actual amount of profit to be gained from the house over the years. Hence, getting a home is no more limited to the “sweet home” concept. It has very well gained a investment approach with a strong return. In case your house is furnished, no doubt the amount of profit would be far higher.

The key point of opting for Garia is its connectivity to EM Bypass and the potential it carries in the upcoming 8-lane expressway connecting it to the city in a much better way. Alongside, the proximity to the metro stations of Kavi Subhash in New Garia, Kavi Nazrul in Garia Bazaar and Shahid Khudiram in Birji have increased the net worth of the place at a great volume. The area also has all the necessary amenities like good schools, hospitals, markets and all others at the vicinity. This has given it the edge over other localities in the city.

What is the present situation on the Kolkata real estate front?

As it is about making the consideration about purchasing a property the potential real estate buyers opt for multi-storey apartments as they are the more unique and effective options and reap great profitability in the long run. They are the more tailor made options and can be customized according to the needs in a much better way. That’s the reason the major Kolkata real estate companies are concentrating more on development of multi storied residences as the Kolkata buyers are more inclined towards buying the same as they come with much more readiness and are always in a ready-to-move mode. There is also a steady inclination towards buying flats in south Kolkata in localities like Ballygunge, Kasba, Tollygunge, Jadavpur, Behala, Garia, Sealdah, Alipore and Prince Anwar Shah Road. They are indeed great place to lock the property as over time they generate great ROI. Therefore, if a survey on the home buyers would be taken it will be well seen that they either prefer plots or houses and more precisely multi storey residences in this region.

The budget that most of the buyers comfortably afford in these areas ranges from 20-40 lakhs and the interesting fact happens to be that the flats that comes below the budget line of 20 lakhs they are highly undersupplied and on the contrary high demand for flats with a price tag of 1 crore can be observed.

The great destinations for top class rentals include Garia and Behala. The best advantages shared by the localities include availability of hospitals, schools, commercial complexes, metro connectivity and enroute to EM bypass and there are several other advantages in terms of the infrastructural benefits and so on. The average price of properties in these regions move around Rs 3600 per sq ft and still the demand is constant.

The Kolkata real estate sector is booming steadily and there is a constant demand for housings and plotted properties in and around the city. More inclination towards multi storied apartments can be seen but the overall demand is ongoing. Here is a short overview.

Which place in Kolkata is a better option for plotted investment?

The plotted development in Kolkata put forward a lucrative avenue for investment in the realty sector for the Kolkatans. At present plots of different sizes are available in the city and its outskirts conforming to the budget of the different potential buyers. Let’s take a quick glance on the areas that are potential enough for a fruitful plotted investment alongside buying residential apartment in Kolkata.

South Kolkata being an important location in the real estate map of Kolkata offers great options to the buyers in terms of retail shops, plotted investment and residential apartment in Kolkata. The areas that have gained great popularity in the context of offering favorable plots for buy include Diamond Harbour Road and Baruipur. Although both these locations lie in the outskirts of the city but still they have grown by leaps and bounds during the recent years with huge scale of development in terms of transportation networks that well connect the city with its suburbs. In the last two years or so the locations have seen a rise in the capital value by 15-30 per cent at least.

A buyer can easily find plots with area ranging from 1200-2500 sq.ft and even more. The plots are available for budgets as low as 10-20 lakhs or even lesser. The best part is that these same areas have great potential to get enhanced in their valuation over the next few years. Therefore investing on them will stand as a profitable option no doubt.

At the same time areas like Joka, Pailan, Amtala are also places where plots are available in huge scale and at favorably low price. Investment on them will indeed bear great fruits in due course. The extension of the metro railway network across the city is one of the vital driving forces behind the growth of these areas as lucrative investment options. This is the reason; they are the hot choices at present over buying retail shops or residential apartment in Kolkata.

Investment on plotted land has emerged as one of the great options in the realty sector in the city. They are rather more popular options over buying a retail shop or a residential apartment in Kolkata. Here is a brief look through the different regions having immense potential in that context.