Kolkata Property Registrations Surge 25% YoY in June 2024: Knight Frank Report
Kolkata's residential property market saw growth in June 2024, with property registrations reaching their highest levels for the month in the last five years. This surge can be attributed to the impending expiration of the state government's stamp duty rebate and circle rate reduction, which prompted a rush among potential buyers to finalize their purchases before the incentives lapsed.
Growth in Property Registrations
According to a report by the real estate consultancy firm Knight Frank India, a total of 4,292 residential properties were registered in the Kolkata Metropolitan Area (KMA) in June 2024. This represents a robust 25% year-on-year growth compared to June 2023. The data includes transactions from both the primary (fresh sale) and secondary (re-sale) markets, indicating a significant uptick in buyer activity across the board.
Impact of Stamp Duty Rebate
The surge in property registrations can be largely attributed to the West Bengal government's temporary relief measures introduced in 2021. These measures included a 2% reduction in stamp duty and a 10% reduction in the circle rate, aimed at stimulating the real estate sector, which had been adversely affected by the COVID-19 pandemic. Although the relief measures were extended several times, they were set to expire at the end of June 2024. The impending deadline prompted many potential buyers to expedite their transactions to benefit from the lower costs, leading to the surge in registrations observed in June.
Shift in Unit Size Preferences
The Knight Frank report also highlighted a notable shift in buyer preferences regarding unit sizes. Properties measuring up to 500 square feet saw an increased share in registrations, rising from 36% in June 2023 to 42% in June 2024. Apartments in the 501-1,000 square feet range remained the most popular, constituting around 51% of total registrations in both June 2023 and June 2024. Interestingly, there was a significant decline in the demand for larger units exceeding 1,000 square feet, with their share dropping from 22% to a mere 7% over the same period.
Geographical Distribution of Registrations
The geographical distribution of property registrations within Kolkata also experienced notable changes. In June 2023, the South Zone held the top spot with a 57% share of the city's total apartment registrations. However, by June 2024, its dominance had waned, with its share moderating to 33%. Conversely, the North Zone saw a rise in its share, climbing from the second rank with a 16% share in June 2023 to the top position, capturing 43% of the total registrations in June 2024. The East and West zones also witnessed fluctuations, with the East Zone's share decreasing from 16% to 10% and the West Zone's share increasing from 8% to 15%.
Industry Experts' Outlook
While the stamp duty rebate significantly boosted property registrations in June, industry experts believe the market's inherent resilience and latent demand will likely continue to drive growth, albeit at a slower pace without the incentive. They also urged the state government to consider further reductions in stamp duty to enhance affordability and maintain the positive momentum in the Kolkata property market.
Future Prospects for Kolkata's Property Market
The growth in property registrations in June 2024 underscores the resilience of Kolkata's real estate market. While the expiration of the stamp duty rebate and circle rate reduction played a significant role in this surge, the market's underlying strength and demand remain strong. As the market adjusts to the new norms without the incentives, the focus will likely shift to other factors influencing buyer behavior, such as economic stability, interest rates, and government policies.
Conclusion
The surge in property registrations in Kolkata in June 2024 marks a significant milestone for the city's real estate market. Driven by the impending expiration of government incentives, this growth reflects the market's resilience and the strong demand for residential properties. The shift in buyer preferences towards smaller units and the changes in geographical distribution of registrations highlight evolving trends within the market. As industry experts call for continued support from the government, the future of Kolkata's property market appears promising, with latent demand and inherent market strength expected to drive sustained growth.
