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KOLKATA RESIDENTIAL UPDATE JULY TO DECEMBER 2017 KnightFrank.co.in

Kolkata Real Estate Report H2 2017 Presentation

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Page 1: Kolkata Real Estate Report H2 2017 Presentation

KOLKATARESIDENTIAL UPDATEJULY TO DECEMBER 2017

KnightFrank.co.in

Page 2: Kolkata Real Estate Report H2 2017 Presentation

2

RESIDENTIAL RECAP H1 2017

End-user sentiments subdued

Demonetisation hangover

Affordable and mid-segment projects

boost Southern and Nothern

peripherals

Page 3: Kolkata Real Estate Report H2 2017 Presentation

3

Substantial drop in Kolkata residential

prices for the first time in the last five years

Page 4: Kolkata Real Estate Report H2 2017 Presentation

Effective price discount of

12% across markets

City prices

shrink by 5%

4

3,408

3,538

3,514

3,535 3,575

3,395

2,000

2,200

2,400

2,600

2,800

3,000

3,200

3,400

3,600

3,800

Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017

-5%YoY

Page 5: Kolkata Real Estate Report H2 2017 Presentation

Rajarhat New Town

sees 12% YoY

price correction

due to a sluggish

market scenario

MADHYAMGRAMINR 2,500-3,100/sq ft

-4%BT ROADINR 3,200-4,300/sq ft

-3%

RAJARHAT NEW TOWNINR 4,000-6,000/sq ft

-12%

SALT LAKEINR 5,000-7,500/sq ft

-4%

JESSORE ROADINR 4,100-5,600/sq ft

-2%

NARENDRAPURINR 2,500-4,300/sq ft

-2%

BEHALAINR 3,200-4,600/sq ft

-4%

TOLLYGUNJINR 5,500-13,500/sq ft

-17%

KANKURGACHIINR 5,250-8,500/sq ft

-9%

Page 6: Kolkata Real Estate Report H2 2017 Presentation

70

80

90

100

110

120

130

140

Price divergence widens

6

CPI

KOLKATA

Page 7: Kolkata Real Estate Report H2 2017 Presentation

77

Kolkata an affordable market,

becomes even more consumer-

friendly, well within the

Knight Frank Affordability

Benchmark* of

4.5(*house price to income ratio)

2017

3.52010

5.7

Page 8: Kolkata Real Estate Report H2 2017 Presentation

Mounting unsold inventory

impacts new launches volume

Segment under pressure due to

delay in HIRA notification

Yearly supply

8

14,384

21,473 22,047 20,441

30,264

22,753 20,984

15,940

2010 2011 2012 2013 2014 2015 2016 2017

47% drop from peak in

2014; developers focus

on completion of under

construction projects24% YoY

No

. o

f u

nits

Page 9: Kolkata Real Estate Report H2 2017 Presentation

Huge inventory overhang

brings new supply to

grinding halt

9

14,611

15,653

12,073

10,680

11,891

9,093 9,764

6,176

H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017

32% YoY

No

. o

f u

nits

Half-yearly supply

Declining trend of

launches;

61% down from peak

in H2 2014

Page 10: Kolkata Real Estate Report H2 2017 Presentation

Rajarhat-New Town bow

down to inventory pressure;

launches shrink by 33%

YoY

SOUTH

1,976 units

-37%

EAST

124 units

-86%

NORTH

1,544 units

16%

RAJARHAT

2,470 units

-33%

CENTRAL

62 units

-12%

• North Kolkata locations like

Jessore Road, BT Road, VIP

Road notice 16% YoY

uptrend in launches

• South Kolkata sees a 37%

YoY drop over H2 2016 due

to huge concentration of

housing stock in mid and

budget housing categories

Page 11: Kolkata Real Estate Report H2 2017 Presentation

11

INR H2 2016 H2 2017

<2.5 mn 67% 51%

2.5-5 mn 20% 20%

5-7.5 mn 8% 22%

7.5-10 mn 3% 1%

>10 mn 2% 6%

Ticket sizes that saw

maximum change in H2 2017

Affordable housing projects in

vogue as majority of projects

launched in ticket sizes of less

than INR 2.5 mn, albeit a drop

from 67% in H2 2016 to 51% in

H2 2017

Page 12: Kolkata Real Estate Report H2 2017 Presentation

31% sales decline from peak

in 2015

Buyer preference skewed

towards completed projects

12

12,664

16,078 16,394 15,553

18,751

20,618

17,647

14,147

2010 2011 2012 2013 2014 2015 2016 2017

20% YoY

Yearly sales

Weak buyer sentiment

post demonetisation

not yet uplifted; sales

declined by 20% YoY

No

. o

f u

nits

Page 13: Kolkata Real Estate Report H2 2017 Presentation

34% decline from peak of H2 2015

Delay in HIRA implementation

deterred buyers’ decision

Only pedigreed developers and

finished products driving sales

closures

13

7,033

8,501 8,163

6,874

8,607

9,170

7,308

6,038

H2 2010 H2 2011 H2 2012 H2 2013 H2 2014 H2 2015 H2 2016 H2 2017

Half-yearly sales

Multiple policy reforms

send end-users to sit

on fences; sales shrunk

by 17% YoY

No

. o

f u

nits

Page 14: Kolkata Real Estate Report H2 2017 Presentation

Rajarhat witnesses sales

de-growth of 21% YoY due

to low volume of finished

products available for

immediate take-up

SOUTH

1,751 units

-30%

EAST

906 units

17%

NORTH

1,268 units

-6%

RAJARHAT

2,063 units

-21%

CENTRAL

60 units

-46%

• Peripheral micro-markets

(North) witnessed less sales

decline because of relatively

affordable pricing and

infrastructure (metro) push

• Sales volume rise 17% YoY

in East on the back of

affordable housing push by

government

• South noted 30% sales de-

growth due to oversupply of

mid and budget housing

products

Page 15: Kolkata Real Estate Report H2 2017 Presentation

Highest QTS since 2015

More than 3 years to offload

existing inventory

Age of inventory rises from 8.1

quarters in 2015 to 12.1 in 2017

Analysis of unsold inventory and QTS

15

32,9

14

35,4

95

36,9

50

35,8

74

34,4

26

37,4

59

39,1

14

39,2

52

8.5

11.1

12.5

10.710.3

8.3

10.6

12.1

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

28

,000

30,0

00

32,0

00

34,0

00

36,0

00

38,0

00

40,0

00

H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017

QT

S

Un

so

ld In

ve

nto

ry

Unsold inventory QTS

Market stress

aggravated by sharp

increase in QTS and

age of inventory

Page 16: Kolkata Real Estate Report H2 2017 Presentation

CENTRAL

60 units

QTS: 6.2

Age: 9.9

Largest markets of

North and South

Kolkata face the

highest distress

Age and QTS in quarters

SOUTH

12,168 units

QTS: 12.8

Age: 13.8

RAJARHAT

10,991 units

QTS: 10

Age: 10.6

NORTH

11,383 units

QTS: 13.3

Age: 13

EAST

4,318 units

QTS: 10

Age: 10.3

Page 17: Kolkata Real Estate Report H2 2017 Presentation

KEY FINDINGS

01 03

02 04

17

Annual launches drop 47% from

peak in 2014; developers focus

on completion of under

construction projects

Effective price discount of

12% across markets

Market stress aggravated by

sharp increase in QTS and

age of inventory

Weak buyer sentiment post

demonetisation not yet uplifted;

annual sales declined by 20%

YoY

Page 18: Kolkata Real Estate Report H2 2017 Presentation

KOLKATARESIDENTIAL UPDATEJULY TO DECEMBER 2017

KnightFrank.co.in

[email protected]