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The recent Budget proposal which links tax benefits on account of home loans up to Rs 25 lakh may invigorate the Kolkata real estate market more than any other major metro city.
This year's Budget gave additional tax deduction on interest of up to Rs 1 lakh for first time home loan of to Rs 25 lakh, and property value of Rs 40 lakh. Interestingly, among the four metro cities of Delhi, Mumbai, Chennai and Kolkata, it is only in Kolkata that Rs 40 lakh can still buy as much as 1,000 sqaure feet home, that too not very far from the city.
While Kolkata may not have seen many mega housing projects in city proper, city fringes are likely to see a multitude of small housing projects in areas like Rajarhat, E M Bypass, Diamond Harbor, Garia and Kona Expressway over the next twelve to eighteen months.
According to data from magicbricks.com, the lowest prices for property around Kolkata range between Rs 1,500 to Rs 2,500 per square feet. In fact, Kolkata seems to be the only market where residential real estate development in some areas is still selling at prices less than Rs 2,000 per square feet. For example, property prices in Amtala, about 20 KM away from Kolkata at present is close to Rs 1,500 per square feet, while that in slightly more developed areas like Airport is about Rs 2,723 per square feet. A 1,000 sqaure feel house within a Rs 40 lakh budget gives ample options for home buyers in areas like Bangur, Bransdoni, Behala and even in the IT hub of City Centre New Town area. The highest property prices in Kolkata is at Alipore area, its costs Rs 12,000 to buy a square feet of residential block.
However, the highest in Kolkata could buy one average property in terms of locality in Mumbai. According to information at magicbricks.com, per square feel residential real estate in Altamount Road in Mumbai sells at Rs 64,778 per square feet. Residential property prices in Borivali East and West is about Rs 12,000 per square feet, a price equivalent to real estate price in the high street locality of Aliopore in Kolkata. In Delhi too, the property market is not much different from that in Mumbai. The lowest property prices in Delhi seem to be nothing less than Rs 8,000 per square feet. A property price in plush areas like Defence Colony is as high as Rs 32,000 per square feet, according to magicbricks.com.
In Chennai, a sub-Rs 40 lakh budget gives a buyer many options, but not as many as in Kolkata. However, nothing much would be available at below Rs 3,000 per square feet price.
"Kolkata could see a higher number of real estate transactions over the next few months due to the Budgte proposal. It will have more impact in Kolkata than in cities like Delhi, Mumbai and Bangalore," said Jitendra Khaitan, chairman and managing director, Pioneer Property.
Traditionally, Kolkata has been regarded as an end-users, rather than investors market, which has kept the real estate sector immune to sharp price movements in other parts of the country.
In spite of a number of small projects lined up to be launched, land is posing a problem in launching big projects.
One of the biggest hurdles in developing new townships in West Bengal is the the Urban Land (Ceiling and Regulation) Act (ULCA), 1976. According to the Act, the ceiling limit on vacant land in a category 'A' city like Kolkata is 7.5 cottah or about 500 square meters.
West Bengal is one of the few states in the country to have a legislation like the ULCA.
Recently, the West Bengal government had formed a task force to look into the issues related to allotment of large land.
