“Latest trends in Kolkata’s Residential Real Estate Market”

Introduction

The residential market in Kolkata has experienced an important change, which is marked by substantial dynamic changes and growth. Modern trends can be evident in traditional housing arrangements due to infrastructure transformations and economic advancements. Rapid expansion can be seen in the urban areas along with the outskirts with the introduction of modern infrastructural projects in the suburban areas. As a result, the suburban areas have become a hotspot for the sought-after residential projects in the city. Additionally, the increase in the income level of the public along with the improved transportation facilities and rise in the commercial ventures have gradually increased the demand for a diverse housing option for the inhabitants of Kolkata and its surrounding areas.

Recap of Residential Real Estate in the Previous Year

In the year 2023, a significant shift can be evident in both the supply and demand dynamics of the residential Kolkata real estate market. However, one of the major notable changes was the hike in the new supply with the launch of 15,303 units which recorded an impressive growth of 87 per cent in year-on-year supply. This proactive response has occurred due to the increasing demand in the housing industry of Kolkata. Additionally, the various locations in Kolkata such as Rajarhat, New Town and Howrah have emerged as major focusing points for the residential developments in the city with a maximum number of launches.

However, the demand side in residential sales has experienced a healthy growth of only 16 per cent in year-on-year, with sales of 12,515 units in the year 2023. Specific localities such as New Town, Rajarhat, Baranagar, Dankuni, and Joka emerged as the hotspot for residential sales in 2023. This indicates a clear preference among homebuyers for areas that offer a mix of amenities, connectivity, and livability factors. In the meanwhile, homes with a price range of Rs. 25 to 45 lakhs have dominated the demand in Kolkata’s residential market. The sales in the affordable segment made around 38 per cent of the total market share of Kolkata’s residential real estate market in the year 2023.

Practically, this shows a spike in the demand from middle-income home buyers, who are looking for affordable as well as quality housing options in the city. Moreover, the higher type preferences for middle-income people seem to be the 2BHK and 3BHK type of flats in Kolkata, which capture around 43 per cent and 42 per cent respectively of the total sales in the residential housing industry.

New Trends in Residential Real Estate in the First Quarter of 2024

In Q1 2024, residential sales in Kolkata totaled 3,860 units, marking a significant annual growth of 73%. This reflects a notable improvement in market conditions and demand levels compared to the same period the previous year. However, when compared to Q4 2023, there was a quarter-on-quarter decline of 19%, suggesting a slight contraction in sales activity. While this decline may indicate a seasonal slowdown or short-term fluctuations in market dynamics, the overall trend remains positive when viewed in the context of year-on-year growth. Despite the quarterly dip, the substantial increase in sales compared to Q1 2023 underscores the resilience and potential of the Kolkata residential market, indicating a sustained upward trajectory in the long run.

Downfall in Supply

Kolkata's new supply in Q1 2024 amounted to 1,490 residential units, depicting a substantial year-on-year decrease of 45%. Compared to Q4 2023, there was a steeper quarter-on-quarter decline of 72%, indicating a significant slowdown in development activity within just one quarter. This sharp decline in new supply indicates a notable contraction in the market, implying potential challenges or constraints faced by developers in bringing new projects to the market during this period, or shifts in developer strategies.

Conclusion

The residential market trends in Kolkata in the first quarter of 2024 reflect a dynamic landscape characterised by continued sales activity and evolving preferences among homebuyers. However, with data highlighting a challenging new supply situation in Kolkata during Q1 2024, characterised by significant declines both sequentially and year-over-year, this may have implications for the future dynamics of the residential market in the city, including potential effects on pricing, inventory levels, and market competitiveness.