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- Originally Posted by varunA boom in real estate sector across the country has not left Kolkata behind as a number of upcoming townships in city suburbs are attracting investors and mass housing complexes to some untapped suburbs.
According to estimates by the Confederation of Real Estate Developers of India, in the next five years 250 million sq feet will be added to greater Kolkata, requiring an investment Rs 37,500 crore. Rajarhat in the north-east, Dankuni in north-west, Howrah in the west, Diamond Harbour road beyond Joka and Batanagar in the south-west and the Garia-Narendrapur stretch in south-east are areas which will see more than 50 per cent price rise in the next one year, said real estate sector sources.
Two years back, property prices in Rajarhat were not more than Rs 1,200 sq feet. Prevailing prices are not less than 2,800 per sq feet. Unitech, which is developing a 150-acre township in the area, is selling at around Rs 3,000 square feet. By the next year, Unitech expects to sell at not less than Rs 4,000 sq feet. In Dankuni, a mega township by the DLF group along with a couple of infrastructure projects are pushing up property prices. The second Vivekananda Setu (across the Hooghly River) and the Belghoria Expressway, which are under construction, will further boost the prices here as Dum Dum airport will only be 20 minutes from Dankuni once the construction is over.
Property prices in Dankuni have escalated by 40 percent over the last year, and about 50-60 percent rise is expected the next one year. It is only after two-three months that the exact price rise in the Dunlop area can be anticipated, but the area will see a substantial price rise after the DLF brand.
In the west, Howrah is another developing area as it has emerged as a suitable destination for middle-income group housing and small businesses based in Kolkata. Along with high-end township, a number of shopping malls and other public-utility service centres, which are coming up in the area are expected to jack up the prices. The Kolkata West project, a mega township project, is attracting a number of NRI investors in the area.
In the south-west, the proposed township on the surplus factory of Bata India at Batanagar is pushing up the prices. The selling price per square feet area in the township is expected to be around Rs 2,000, whereas the ruling prices in the area is around Rs 900 per square feet. "It is wrong to say townships are pushing up the prices in a particular area, the construction cost over the last year has gone up so much, that it is impossible to built houses at less than Rs 1,000 square feet," claims Sumit Dabriwal, managing director of Riverbank Holdings Pvt Ltd, which is executing the Batanagar township project.
In the south-west, Diamond Harbour road stretch also witnessed moderate price rise over the last year, mainly due to the government's proposal to develop a township in Baruipur. Alongside, Raichak-Kukrahati bridge is expected to drastically cut travel time to Haldia. Both the projects are scheduled to be built by Indonesian company Salim. However, the fate of the projects appear uncertain as of now because of local opposition to the presence of Salim as an infrastructure developer.
In consequence, real estate analysts do not predict substantial price rise in the area over the next year. Garia and Narendrapur in the south are other areas attracting investors and occupiers, as metro rail extension till Garia will ensure easy connectivity to the rest of the city. The prevailing prices in Narendrapur is around Rs 1,500 square feet. A moderate 15-20 percent rise in price is expected in the coming year. Areas like Patuli, Baishnabghata, Barrackpore, Sonarpur and Barasat are some other upcoming areas drawing the attention of small investors and MIG and LIG occupiers.
Following industrial development in smaller West Bengal towns like Durgapur and Haldia, a number of housing projects are driving real estate sector development in the areas. As Kolkata appears to be poised for rapid information technology sector led growth in the coming years, many property consultants feel the time is just right to invest in Kolkata.
It is the right time to invest in property in Kolkata, as at least 50 -60 percent price rise is assured in the some of the developing areas in Kolkata. Suburban locations are witnessing some pressure as increasing interest rates have magnified the outflow for genuine purchasers. While Kolkata market has traditionally been know to be less volatile compared to Mumbai and Delhi, and hence, any investor who is comfortable with the city and moderate long-term returns, can consider this is as a reasonably safe destination.
Kolkata continues to be a tier-II location in terms of property and land valuation, and most experts think the city will take quite some time to catch up with developed markets like NCR and Mumbai. Kolkata is referred to as a Tier II City for commercial growth and as of now does not compare to the real estate prices witnessed by more established markets like Mumbai and NCR, despite Kolkata's recent emergence (or relatively newer emergence) as an IT/ ITES.
Furthermore, there is still hesitation amongst new entrants for Kolkata as a destination; hence the demand will be a factor which will act as a deterrent to growth. Price appreciation has been in the range of 15 per cent to 20 per cent on an average through the past 12–18 months in Kolkata and may remain similar in the next year. Certain areas like New Town Rajarhat where several mass housing projects are nearing completion, the prices may appreciate 5 per cent more than the other areas.
Resurrected this 5 years old post and amazing to find that absolutely nothing happened in last 5 years..... and how completely wrong was the writer
Dankuni DLF project is gone
Kolkata West and Kolkata South projects are in soup, atleast west came up though!!
Bata and Mahehtala projects are non starter .. it's there but not many are interested to move there.
On the contrary, Garia area appreciate significantly.
Rajarhat still in Limbo and I don't know which projects were nearing completion 5 years back, except a handful.
The bottomline is, Kolkata is as usual developing hapazardly and soon will be the largest slum!! I am sorry to say that but the indifference of the local people (don't just blame the netas) there is really something that I have hard time to tolerate.CommentQuote0Flag
- Gharondabhai, while I agree to your comments, we should also look at the realty to certain extent.
Post 2007, the world hasn't done any better either, with the recession and its fallouts.. So, these last 5 years in particular won't help in arriving at a good judgment. We also had a change in Govt; that usually leads to a lot of policy In-action typically during any Govt transition (1-2 years).
I believe, one can do a better analysis if you compare 2003-08 or 2011-16. I was reading a report from Mckinsey where their analysis says Kolkata will be 3rd as far as Metropolitan development is concerned and this is supported by job growth to a large extent. If this turns true, it means, kolkata will jump ahead of others atleast by 1 or 2 places.
I believe, next level of RE boom in Kolkata will be seen only after the Govt is able to accomplish the Infra projects - Airport Ph1, Ph2, Metros and Flyovers etc etc within next 5-8 years. All these Infra dev will be quickly followed by a job generation and then finally, the needs of new workforce for a home of their own. RE will have to wait, however until then, it will a period of consolidation accompanied by sporadic and unplanned development.
On worrying factor specifically for RE is that home prices will reach such levels in the Metropolis that the new workforce will find it really challenging to buy anything !!CommentQuote0Flag
- Joydeep, you are correct to some extend about the development of RE in Kolkata. But now the problem that comes in the our Industrial and Land Acquisition policy of Govt.
Recently heard that Noapara - Barasat metro line had been stop due to illegal settlers as they don't want to move and L&T don't want to pay them compensation.
National Highways are not widen due to land problems.
In every development process there are lot of problems, So Please tell me how we solve this kind of issues ??CommentQuote0Flag
- "In a democracy, people get the government they deserve". The problem will have to solve itself, people will have to realize that infra is required and people who's land needs to be acquired have to be compenseted handsomely. Let the government advertise that they need land along a certain stretch and circulate an above average of the market price, the benefits that the people are going to derive from the infrastructure, in short educate and incentivize in the absence of eminent domain.
I may be over simplifying a complex problem, but we have a tendency to complicate without attacking the root cause which is to educate(push) and to incentivize (pull).CommentQuote1Flag
- I liked every bit of what Debeshwar said. It is WE who can do it; not the IREF forum members only, but citizens of the state. It is overall progressive and inclusive growth mindset of the people of state, that is the solution here, and nothing else!!
To give an real-life example of how Gujarat model worked in case of recent Maruti plant announcement there - Govt identified a huge land bank in Hansalpur village, when they had no prospective investors in mind. Villagers also never knew about any upcoming industry there. This meant that if you give a little above market price, people will come forward on their own. Now that Govt has a land bank, a year later, Mr. Modi chances upon Maruti's ongoing pain at Manesar and offers Gujarat as an alternative. The very first thing that Maruti asked him was - "Well, if only you have ready land there". And, Yes, we have land and we created it long back in anticipation of industry one day, came the answer.
Now, with other incentives in place, Maruti declared their plant at Hansalpur village. Land prices shot up 20 times within last 3 months. Villagers have started to hold-on to their land now rather than sell because they sense more appreciation if they hold it.
If you now understand, all stakeholders had a role to place here-
1. A pro-active govt to start with, making basic things available before they are needed for industry.
2. People support - Progressive mindset is stopping people who gave their land to Govt 1 year back to take shelter under a Flag and start opposing the project. They still feel that such an industry will help us in the long run. People who have held their land are also willing to give it to Support functions - ancillaries, shops, markets, housing etc, albeit at the market price which is higher.
3. Opposition - Unlike Bengal, they don't lend their Flag to become a shelter for those who JUST want to protest.
4. Industry - Every entrepreneur feels it is significant for them to come to state where everyone else is going from the same industry - say automobile, bringing their costs down.
THIS is not happening in Bengal. We first declare the project. Land prices shoot up 20 times, then we ask for land from people and they start playing "holding up" instinct and Industry also can't setup units there because their cost has gone through the roof. So, it can never work out !!CommentQuote2Flag
- Nicely explained Debeswar and JoydeepR.. it's trueCommentQuote0Flag