Posh areas take a realty beating
Dec 23, 2013
Source : The Times of India


KOLKATA: Will the government do anything to tame the rising trend of inflation? Is there anything in the market that I can buy at a reasonable price? Set aside your first question for policymakers at the Centre, but as far as your second query is concerned, we certainly have an answer. You can buy a property at select parts of the city where real estate prices are literally on the wane. Sounds intriguing? Read on.

Real estate prices in Ballygunge and Prince Anwar Shah Road have come down after staying stagnant for last few months. According to a study conducted by one of the largest online property portals in the country, property prices in these areas - two of the most prime residential areas - have gone down in last three months. For a 1,000-sq ft property on Prince Anwar Shah Road priced at around Rs 1.10 crore, there has been a 2% decline. Similarly, for an equal-sized property in Ballygunge priced at around Rs 90 lakh, prices have dropped by around 1%.

"In some areas, the developers might have offered discounts to buyers. Properties in these areas are over-priced and of late, there were not many takers for these properties," said Sushil Mohta, vice-president of CREDAI Bengal. "But such small dips cannot be taken very seriously as we are expecting a good rise in real estate prices next year," he added.

Significantly, the study finds that prices in these areas saw a dip after skyrocketing by around 40-41% during the first three months of the current fiscal. Following that, the price band remained stagnant before inching down. So what led prices to come down suddenly?

"Prices are determined by the demand-supply ratio and in last one year, economy has not been doing well. There might have been cases where realtors have gone for distress selling. But so far, they are marginal in number," explained Jitendra Khaitan, CMD of Pioneer Property Management Ltd.

But realtors like the Jain Group think that properties in the upper-most segments in Kolkata are over-priced. "Honestly, Kolkata has never had a very booming luxury real estate market and whatever ultra-premium projects are available, they are terribly over-priced," felt Rishi Jain, executive director of the Jain Group. Naturally, these luxury projects, he said, have several additional compliances that act as a deterrent in the overall development as well.

In some of the mid-range projects in Kolkata, realtors have started bringing down the prices by offering interest subvention schemes. In some of the projects, realtors are agreeing to take care of EMIs before the flat is handed over to a buyer. Such announcements come at a time when a few banks like the State Bank of India, HDFC Bank and ICICI Bank have started lowering home loan rates.

"It is true that off-take of flats have come down at some places. Lower demand has kept prices stagnant," said Abhijit Das, office director (east) of Cushman & Wakefield. "But for localities like Ballygunge and Prince Anwar Shah Road, where supply is very limited, it will not remain the same," he said.


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