Demonetization has its sheer effect on various asset classes, but its impact on the real estate market of Kolkata is slightly different. Here’s a look into that and a discussion on whether it’s viable to buy a property in Kolkata now.
When the sudden declaration of demonetisation by the Government of India hit the market hard just a year back, myriad opinions emerged about its short and long-term effect on the property market.True, that the real estate market could not escape the effects of demonetisation, but unlike the other market segments, the property market had faced the situation somewhat differently.
Now, considering the present scenario, if someone wants to buy a 2 BHK flats within 25 lakhs in Diamond Park, there are several factors to consider. In fact, our discussion here mainly involves, whether it’s the right time to invest in property in Kolkata now after demonetisation.
So, here are certain factors that should be taken into account.
Financial Crisis Did not Crash the Property Market of Kolkata
Over the past few years, Kolkata has found a strong hold in the real estate market.Even when the stock market index plummeted by more than 50% from its highest point during the Great Recession of 2008,nearly all the asset market witnessed a severe value destruction. But, the point to be noted is that, the stock market did not crash in the same way in 2008 as it did post demonetisation.
While most of the builders and property marketersanticipated a moderation in property demand, the situationin reality revealed a complete different picture.Even in the post demonetisation era, the real estate market of Kolkata proved to be far more resilient.
The Dynamics of Market Operate Differently
Unlike the other metro cities, Kolkata real estate is affordable and mostly consisted ofresidential units.Additionally, there’s a predominance of resale properties too.Most of the propertybuyersof Kolkataprimarily buy apartments for living or getting a rental income. Moreover, with thesteep decrease inthehome loan interestrates (currently starting from 8.30%), a vast majority of interested homebuyers are prone to buy affordable homes in Kolkata.Affordability is certainly one of themajor deciding parameters behind thegrowth of property price in Kolkata.
A Number of Infrastructure Development Projects Has Rolled Out in Kolkata
While the growth prospects of the metro cities like Delhi and Mumbai are better , compared to Kolkata, there’s some significant infrastructural development in the recent times.In the past few years, the capital city of Bengal has seen significant improvements in terms of improved road.
network, reliable power supply, growth of shopping malls and hangouts spots and most importantly,extension of Metro and BRTS connectivity.In addition to these, the civic amenities have also improved.No doubt, these factors inched up the property price of Kolkata even in the post demonetisation phase.
The Final Statement
While demonetisation not really affected the property sale in Kolkata, it has certainly introduced a series of favourable condition for the buyers to make investments now.In the first place, it has reduced the home loan interest rates, following the excess liquidity in the banking system.Secondly, it has also reduced the inflation rate.It is expected that the real estate fraternity is soon to adopt the better consumer protection policies following RERA.
So if you are planning to buy a property in Kolkata, this is high time you should make the investment.