Kolkata at last has come of age. It can now rightly claim prized place beside the veterans Mumbai and New Delhi, and the upstarts Bangalore and Pune – because Kolkata’s property prices are rising.
For long, we’re told, Kolkata’s land prices have been kept deliberately low by local developers because they did not want the cream of their profit to be layered thin. What they were doing therefore was acquiring large tracts of land at rock-bottom prices, and selling flats they built on them at relatively higher prices, thereby ensuring in some cases as much as 80-100% margin for profit.
As long as Kolkata remained a strict no-no, this ploy worked. Of late however realty players from outside are lapping up lands quoting unheard prices. This has resulted in upward spiraling of property prices in Kolkata, which is now almost at par with other cities.
True, consumers are now shelling out more than what it used to be. At the same time, intense competition is forcing the realtors to ensure more value to customers, which means commensurately lower margins for them.
No project worth its name now comes without facilities of modern living. People have also learnt that good living means paying more for it, which they clearly don’t mind.
But then, is too high a property price good for long-term development? It surely is not – not for consumers, not for developers as well.
In the short term, high prices will reign. After all, the city hasn’t seen any real development for long, long time. It matters less as to how much the developers are paying for commercial properties. What is important is how the housing prices behave in coming days.
Once the dust of high prices settles, and several large format housing projects like Kolkata West International City come into being, the real estate prices can be expected to cool off.
One hopes that happens sooner than later.