Knight Frank India, the leading real estate consultancy in India in its report stated that the West Bengal government has agreed to levy stamp duty at a reduced rate till the end of the year (2021), resulting in a 79% increase in residential property registrations in greater Kolkata between January-November 2021. The 2% stamp duty exemption performed wonders for Kolkata's residential real estate sector in the second half of 2021, boosting sales by more than half (51%) between July-November 2021.
Mr. Shishir Baijal, Chairman and Managing Director, Knight Frank India said that registration of mid and luxury residential property transactions in Kolkata has continued to grow at a quick pace, thanks to record-low home loan rates, incentives, and stamp duty reductions.
The original stamp duty reduction strategy, which was intended to increase residential real estate demand, was only supposed to continue until October 30, 2021. Despite the good overall results, November 2021 saw a 62% YoY decrease in growth. Property registrations have decreased YoY for the first time in the last five months.
In November 2021, apartments up to 500 square feet experienced the largest YoY degrowth of any size category, with an 81% YoY decline. The YoY degrowth in unit sizes of 501-1,000 sq ft and 1,001 sq ft and above was 41% and 25%, respectively.
The report also stated that there has been a reduction in this size category as well, it is noteworthy to notice that even when total volumes are low, larger apartments remain the flavor of the month. This is also consistent with the continued trend of end-users gravitating for larger apartments, which has been observed since the outbreak began, as job and study obligations take precedence in house ownership choices. The continuation of the stamp duty cut until January 31, 2022, will help channel additional demand in the residential real estate industry in the future. End-users are likely to make homebuying decisions while the rebate is still available, citing high input costs and the intention to reassess selling prices.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.