There has been a drop of 18% in launches of new projects in Kolkata after demonetization as per reports by Knight Frank. Launches of new real estate properties across the top 8 metro cities have gone down by 41% as per the report by Knight Frank. The drop is 18% in Kolkata as per the 7th edition of the property consultant’s well known half-yearly report titled India Real Estate. As per the chief economist and national director at Knight Frank India, Samantak Das, this drop in new launches can be attributed to a demonetization hangover of sorts.
According to Das, new property launches have reduced drastically and this is majorly due to the after effects of demonetization. Resale transactions have also gone down for properties across the country on account of the same factor according to him. He added that prices of properties have even reduced a little in some parts of the National Capital Region (NCR). In the rest of the country, property prices are stable and have not increased. Das also talked of how foreign investors are taking more interest in investing in the sector after the GST rollout. Since they have to pay a single tax, there is a growing interest amongst foreign investors to invest in India according to him.
The report also stated that Rajarhat, on the outskirts of Kolkata, contributed a whopping 36% of all new launches in the city. Das stated that the residential market continued to be really sluggish in Kolkata due to the lack of a stronger service sector here. With GST and RERA in place, Das feels that global funds will have more confidence towards pumping in money for acquiring real estate in India. He added that interest has also increased amongst developers and buyers alike when it comes to suburban areas like Barrackpore, BT Road, Narendrapur, Baruipur and Garia.
Several real estate developers are also planning to absorb some of the added tax burden of 5-6% after GST in order to prevent a bigger slide in sales and keep buyers interested. According to Das, several builders are striving to absorb this added tax burden across the country. GST is 12% for real estate while taxes were around 6-7% prior to the GST rollout. The report is based on the surveys that are executed throughout Pune, Mumbai, Chennai, Hyderabad, Kolkata, Bangalore, Delhi-NCR and Ahmedabad.