Kolkata real estate sales take a hit with 4% average price drop, micro-markets worst affected

KOLKATA: Real estate has been the worst hit in Kolkata among big cities during the pandemic, leading to an average 4% decline in property prices in January-March 2021 against the first quarter of 2020. While some developments have managed to hold on to the prices, most properties have seen a marginal decline over the past year. India on the whole has fared extremely poorly on the global house price index, dropping 12 spots to 55 among 56 countries, just above Spain.
In Kolkata, the micro-markets in Rajarhat and Howrah are among the worst affected with sales continuing to dip.Last year, these had taken a beating with sales declining by 27%. Rajarhat, plagued by oversupply, saw prices drop by 5%. Properties in Salt Lake and Jessore Road witnessed a 2% dip while it fell by 1% in Kankurgachhi and BT Road.

Knight Frank assistant VP (research) Divya Grover said the decline in certain markets had pulled down the weighted average property price in Kolkata. “Kolkata was also impacted by Amphan. Though sales had picked up in the latter half of the year due to pent-up demand, the second wave has again hit the market,” she said.
House sales had dipped by 21% in 2020 against 2019 while the quarter-on-quarter dip was by a whopping 48% in the last quarter of 2020. That situation, realtors said, had not improved in the first quarter of 2021. While Q1 2020 saw 2,937 units being sold, the sales increased to 3,921 in the third quarter after a washout second quarter owing to the lockdown. In the fourth quarter, sales crashed to 2,054 units. The weighted average price of residential real estate in Kolkata is Rs 3,213 per sqft.
“The price decline is either in micro-markets where there is over-supply or in projects where the developer is offering discount for liquidity. But overall, prices in Kolkata have remained firm,” said Nandu Belani, president of the Bengal chapter of Confederation of Real Estate Developers’ Association of India.
Knight Frank India chairman and MD Shishir Baijal said, “In Q1 2021, India witnessed meaningful recovery in sales volumes.However, with the second wave and threat of new virus variants, there could be a pressure on sales volumes as well as on price growth.”