Launches of real estate properties in the top eight metro cities have dropped by 41 per cent, said a Knight Frank report. In Kolkata, the drop was around 18 per cent, the seventh edition of the property consultant’s flagship half-yearly report ‘India Real Estate’, stated. According to its chief economist, the drop may be attributed to “demoneitsation hangover”.
“New launches of properties have come down drastically. The reasons while new launches declining drastically across India due to demonetisation hangover. The resale of the properties has also taken a hit across Indian due to the same factor,” said Samantak Das, chief economist and national director, Knight Frank India. “In some parts of NCR, prices of properties have slightly come down. In rest of the country, it is stable and has not gone up.” Das also said that foreign investors have taken an interest in investing in real estate sector following the implementation of GST. “Now they have to pay one tax and due to that there is an increase interest among foreign investors to come and invest in the country,” he said. The report also stated that Rajarhat near Kolkata accounted for 36 per cent of all the launches in the city.
Das said Kolkata residential market continues to be sluggish in the absence of a strong service sector. “With RERA and GST in place, global funds will find more confidence toward Indian real estate market,” he said. Baruipur, Narendrapur, Garia, BT Road and Barrackpore in the suburbs have witnessed an increased interest among buyers and developers.
Real estate players are also planning to absorb the post-GST additional tax burden of five to six per cent to prevent further slump in sales. “We had talked to several builders and all of them are trying hard to absorb the additional tax burden of five to six per cent due to GST,” Das said. GST on real estate is 12 per cent and in the pre-GST period, taxation was about six to seven per cent. The report was based on surveys conducted in Mumbai, Pune, Hyderabad, Chennai, Bangalore, Kolkata, Ahmedabad and Delhi-NCR.