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The real estate market in Kolkata Metropolitan Area has seen a growth in the number of residential sales agreements registered in recent months, with a 7% increase from November 2022 to December 2022. The increase can be largely attributed to the state government's introduction of a stamp duty rebate in July 2021. Over the past 18 months, the number of residential properties registered has risen by 61% compared to the 18 months prior to the rebate. Despite the overall increase, the number of registrations in December 2022 was still 17% lower than the number recorded in December 2021.
One of the main reasons for the decline in the number of registrations last December was the hike in home loan interest rates. This has made buying a home more expensive, especially for those with smaller budgets. Homes under 500 Sqft saw the biggest decrease, with 33% fewer registered in December 2022 compared to the same period the previous year. Developers have stated that the decline was also due to the government's announcement to extend the stamp duty rate cut, which has decreased the urgency among potential buyers.
Despite the recent decline, the overall trend in Kolkata Metropolitan Area has been positive since the initial introduction of the stamp duty rebate in July 2021. Over 76,000 residential properties have been registered in the city from July 2021 to December 2022, compared to the 47,317 units registered in the 18 months prior to the rebate. Most registered properties are in the 501-1,000 Sqft range, accounting for half of the total registrations in December 2022. Larger units of more than 1,001 Sqft made up 29% of the total, while smaller units of up to 500 Sqft comprised 21%.
According to Shishir Baijal, the chairman and managing director of Knight Frank India, a further extension of the stamp duty incentive will provide relief for prospective buyers as home loans have become more expensive compared to the past year and a half. He also stated that the government's continued support in this regard will be critical to sustaining and developing the housing market momentum.
Knight Frank India senior director Abhijit Das also emphasized the importance of the stamp duty rebate, stating that it has helped developers sustain homebuying demand and will continue to enthuse homebuyers as loan rates continue to rise. The state government's recent extension of the stamp duty incentive until March 31, 2023, will provide further encouragement for those looking to buy a home in the near future.
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