KOLKATA: The slowdown in real estate construction witnessed in the past two years owing to the disruption caused by the pandemic is set to give way to a surge in activity this year and the next.
While Kolkata used to see 15,000-17,000 ready units hit the market each year, the last two years saw a decline in finished homes arriving in the market. According to real estate consultant Anarock, 23,544 finished homes came to the market in 2020 and 2021. All that is set to change in 2022 and 2023 with 52,821 new ready homes projected to hit the market by the next year-end.
“In Kolkata, around 84,400 units are under construction, of which around 33% is slated to complete by 2022, 29% in 2023, 20% in 2024, and 17% beyond 2024,” an Anarock analyst said.
While the trends are similar in other metro markets, Kolkata witnessed a lesser number of completed homes in 2021 (11,621 units) than it did in 2020 (11,923 units). In all other markets apart from Bengaluru, more units were completed in 2021 than 2020 when lockdown had brought all construction activity to a grinding halt across the country.
According to developers, Kolkata’s anomalous behaviour has as much to do with the severity of the third wave that saw the city being badly battered as it is to do with the industry taking advantage of the rise in demand for homes to reduce the inventory that was already very high.
According to consultancy firm Knight Frank, unsold inventory in Kolkata had hit a peak of 39,252 units in 2017. In 2018 and 2019, the inventory declined to 38,536 and 32,924 units, respectively. The last two years though has witnessed the sharpest decline — 14% in 2020 to 28,160 units and 24% in 2021 — with inventory down to 21,265 units.
Confederation of Real Estate Developers Association of India (Credai) Bengal chapter president Nandu Belani also pointed out that launches in the past several years have also been on the decline, leading to the dip in the addition of finished homes.
Launches have been on the decline since 2014 with the sharpest decline witnessed in 2019 when launches declined from 12,015 units the previous year to 5,654 units. In 2020, that bottomed out at 4,148 units before 2021 saw an 81% surge in launches to 7,510 units.
“The spike in demand for homes and the resultant reduction in inventory has helped the market in Kolkata prepare for growth in the years ahead,” said Belani.
Sales of homes that had been declining steadily since 2015 saw a 62% rise the previous year with 14,405 units being sold against 8,912 units the previous year.