The city’s housing market has seen a dramatic downturn in home sales, with registrations plunging by 18% in July compared to June, and 13% year-on-year. This sharp decline follows the state government’s recent withdrawal of the financial incentives that had previously bolstered the real estate sector.
For the first time in five months, the real estate market has faltered significantly. July saw 3,506 residential properties registered, down from 4,292 in June and a notable decrease from 6,709 registrations in July of the previous year. This downturn is attributed to the cessation of incentives which had been pivotal in supporting the housing market over the past three years. The state government’s earlier measures included a 2% reduction in stamp duty and a 10% cut in circle rates, which had substantially driven market activity.
Analysing the data, mid-sized homes, ranging between 501 to 1,000 square feet, represented the largest segment of transactions, accounting for 47% of all sales in July. This reflects a slight dip from 51% in July 2022. In contrast, smaller homes under 500 square feet saw a significant increase in market share, rising to 45% from 27% in the previous year. Meanwhile, large apartments exceeding 1,000 square feet experienced a considerable decline, representing only 8% of the total transactions this July.
The sudden withdrawal of these incentives has clearly impacted buyer behaviour, leading to a notable decrease in overall property registrations. The shift in buyer preference towards smaller homes and away from larger apartments suggests a market adjustment in response to changing economic incentives and affordability constraints. As the housing market adjusts to the new landscape, industry experts are keenly watching to see how the sector will respond to this significant change. The future of Kolkata’s real estate market will likely depend on whether new measures are introduced to stimulate demand or if market conditions stabilise independently.
