No surprise that demonetization move has hit the national real estate market in a big way. The entire market has been set motionless. Rather than introducing new constructions builders are keen on releasing inventories. Consumers on the other hand withdrawing their booking amount from the under construction buildings as the slowdown in the national market has made them uncertain regarding the builders’ delivery assurance. Potential buyers on the other hand are waiting to catch the fish from the troubled water, in case builders release their inventories in lower market price.
Now that we are finally headed into FY 2017, lots of happening are expected to discover in the property market after the GST implementation and the financial budget. Throughout the couple of years the market had become largely stagnant. Does this mean prices to go even down this year? Will Kolkata realty market be able to clear out on hand inventories within this year? Although market experts had shown some positive indicators in H1 of the previous year, but then came the currency ban announcement which single-handedly proved all the predictions fictitious. But recent report by Knight Frank Indian says that the unsold inventory of residential properties in Kolkata will take nearly two years to sell off.
According to the report, “The unsold inventory of the city is recorded at 37,400 units. The QTS for Kolkata currently stands at a little over eight quarters.” The quarter to sell unsold inventories is exactly proportionate to the quarters requires to tire out the on hand unsold inventories. City’s housing selling has been at reduced speed currently. New launches in the city have fell down by 30 percent in the last couple of years while sales evidenced a dip of 14 percent in the last one year.
What’s more startling is the period of time needed to sell off first-class properties worth Rs 1.5 crore and above across the city. “The QTS for the city’s premium market is currently at 10.5 quarters. This is largely attributable to the relatively slow rate of sales observed in the premium housing segment in the past,” said Sangeeta Sharma Dutta, Assistant Vice President, and Research. Research also indicates upon the alarming volume of newly built unsold property in Kolkata north and south in particular.
Developers are currently sitting idle with large stocks of property and unwilling for any price correction. Besides there is also a negative doing rounds in the market. As an inevitable outcome the ratio between demand and supply has been wrecked.”The decline in sales volume was primarily brought about in the second half of 2016 by the uncertainty and lacks of clarity in the market post the announcement of demonetization of high value currency notes. With most buyers preoccupied in settling down their own financial matters, purchasing of properties in the short term has taken a backseat, thereby reflecting in the reduced sales volume in H2 2016,” added Dutta.
_ By SD Group Kolkata