Stagnant prices hit Kolkata Real Estate.

Following last year’s vibrant real estate environment, signs of a slowdown have emerged in the Kolkata real estate sector, particularly within the residential segment. While property values in prime locations are trending upward, they have remained stagnant at last year’s rates in developing suburbs, largely due to a lack of investment.

For example, in Rajarhat, which serves as a residential and industrial hub in the northeastern edges of Kolkata, and Sector V, home to the IT industry, property prices have experienced minimal variation, fluctuating between Rs 2,500 and Rs 3,000 for nearly a year, despite a significant 25% increase in construction costs over just the past six months.

Over the last two to three years, there has been a remarkable increase of over 50% in residential property prices within this area, leading developers to anticipate a further rise of 15-20% by now. However, the growth rate of property prices, including rentals and outright sales, in the city’s central business district (CBD) has outpaced that of Rajarhat.

Specifically, commercial rental prices in the CBD have surged more than 50%, reaching around Rs 100 per square foot over the last three to four months, while rental rates in Rajarhat have stagnated at Rs 50-60 per square foot. Mr. Himon Sanyal, head of business development at TCG Real Estate, noted that the unprecedented rise in rental values within the CBD can be attributed to a slowdown in construction activities in Rajarhat, combined with its currently underdeveloped infrastructure. “In residential projects particularly, non-residential Indians are not as eager to invest in Kolkata, as they were a year ago, due to fluctuating dollar prices and the overall slump in real estate,” Sanyal stated.

Moreover, developers are becoming increasingly hesitant to initiate new projects and are deferring existing ones by two to three months, as they are concerned about a potential price correction on the horizon, according to real estate experts. For instance, TCG Real Estate, originally set to unveil a new project in Sector V this June, has postponed its launch to October or later.