KOLKATA: The city is likely to witness a slow off-take of residential units despite the state government's efforts to give a push to the sector.
A Cushman & Wakefield study finds that the city will have a demand of less than a lakh residential units in next five years, which will be the lowest among all the metros in the country.
In its report, real estate services company Cushman & Wakefield projected a demand of around 97,300 units in Kolkata between 2014 and 2018. The report also projected that more than half of the demand would come from low-income group. Around 34 per cent demand is projected to come from the middle-income group while rest of the demand will be from people in higher-income brackets.
According to the report, supply of residential units in the city will remain low between 2014 and 2018 at 65,600 units. More than half of the supplies are likely to be in the MIG category, while the demand is projected to be most in the LIG segment. In Kolkata, residential units that cost below Rs 30 lakh are considered to be in the LIG category, while the units in MIG segment are priced between Rs 30 lakh and Rs 1 crore.
"Even nationally, most of the demand for residential units is between Rs 15 and Rs 35 lakh. It shows that more products in that category will create more demand," said Abhijit Das, director (east) of Cushman & Wakefield. He said a subdued demand in the below Rs 1 crore segment is prompting realtors to focus more on constructing affordable housing.
While joint venture with the state government in the real estate sector can help in pushing the affordable segment, it was slow in last couple of years. However, state urban development secretary Debashis Sen said the real estate industry was likely to pick up soon. "Real estate development throughout the country is going through a bad patch. But everybody is hopeful that things will pick up soon and there will be more to look up to in Kolkata," he said.
Sen is also the chairman-cum-managing director of the West Bengal Housing Infrastructure Development Corporation, which plans and executes development projects at Rajarhat New Town on the northeastern fringe of the city.
Former president of Credai and chairman & managing director of Unimark Group Harsh Vardhan Patodia feels that organized realtors in the city were yet to get into the affordable housing segment (below Rs 30 lakh) in a big way. "Once new routes of Metro railway become operational, new micro markets will be created around each station," he said.
Realtors feel that areas within 3 to 5 kilometre radius of a Metro station have emerged as new residential zone.
Realtors in the city also hope that the government's clearance of Section 14Y of the West Bengal Land Reforms Act for townships will help in promoting affordable housing. State government's decision to relax FAR norms will also help properties priced at a premium.
"It is difficult to predict the market over a five-year horizon. So far, the real estate market in Kolkata has been growing at 10% in terms of price," said Jitendra Khaitan, chief managing director of Pioneer Property Management Ltd, one of the largest real estate advisory service providers in the city.