However, the residential property registration in greater Kolkata from July 2021 to April 2022 has recorded an eight per cent growth as compared to the year-ago period, the consultant said. ”Since July 2021, there was a stamp duty reduction by two per cent and a decrease in circle rate by 10 per cent, a lot of transactions happened. Both buyers and sellers took advantage of these reduced rates and many deals took place. Therefore, April with registrations of 3,280 units in Kolkata is satisfactory,” real estate industry body Credai West Bengal president Sushil Mohta said.
Residential apartment registrations in Greater Kolkata fell 10% to 3,280 units in April 2022 compared to the previous month, officials said on Tuesday, and the decline may continue in the short term due to the likely impact of the Reserve Bank of India’s recent policy rate hike on property sales. In April of previous year, 3,673 residential units were registered in the eastern metropolis. “In April 2022 (in greater Kolkata), residential property registrations declined, falling 30% month on month to 3,280. Due to the price escalation, which was seen in the total registration count of sale documents in this month, home purchasers remained cautious in their decision-making,” according to a research by major property adviser Knight Frank.
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”Transactions of overall 11,961 units happened in Kolkata this year so far, which is also satisfactory. There was a price increase in the last three months due to a rise in construction costs. If this price increase was not there, we could have seen more transactions, at least 20 per cent more. Sales should be good this year and the construction area rate may increase 5 to 10 per cent due to the enhanced building cost,” Mohta said. The RBI hiked its key interest rate by 40 basis points in a surprise move on May 4 in an effort to tame inflation that has remained stubbornly above target in recent months.
The latest increase in repo rate – the ratio at which RBI lends to commercial banks – to 4.40 per cent from a record low of 4 per cent was the first such instance since August 2018. The RBI also hiked the cash reserve ratio (CRR) by 50 basis points to 4.5 per cent, for which banks need to park more money with the central bank.
”Inflation and rate hike remain as headwinds for sales. But the impact is likely to be temporary. More rate increase by the Reserve Bank of India is expected and the total hike in the key policy rate in the current fiscal could be in the range of 1-1.25 per cent,” Mohta said.
“Stamp duty benefits will remain for another five months (till September 30, 2022), which will encourage buyers in the market faced with pressures of inflation and hikes in home loan rates. ”This rebate should positively impact the city’s real estate activities, providing relief to homebuyers. We hope that the government will continue its favourable stance towards home buyers in the future, ensuring the current momentum is maintained,” Knight Frank India chairman and managing director Shishir Baijal said.
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