Middle Income Group Affected by Price Hike in Kolkatas Realty

By: George Gonigal

The escalation in real estate values has been across all segments in Kolkata but the worst hit has been the middle income group. With a steady increase of 15-20 per cent in residential property values each year, what was available for the mid segment for Rs 8-15 lakh one year back, has climbed up to 20-25 lakh.

While the premium apartments available in the price bracket of 25-35 lakh an year back has also gone up to 45-75 lakh, the high income group is able to weather the price hike as they have high disposable income and mostly they are working couples.

According to real estate consultant Sandeep Sen of Calcutta Skyline, "In Kolkata the average demand is still in and around 20 lakh. To take an apartment of Rs 20 lakh a customer in usually gets it financed and goes for Rs 17 lakh loan which is 85 per cent of the property value now. This means he must have a salary of Rs 35,000 per month at least.

That is the issue- the hike in salaries has not been keeping pace with the hike in real estate values." Moreover he adds that these are young buyers and the average age of home buyer has decreased to early thirties in the last 5-years only. For the young buyer, the pinch is even more as he has high aspirations of owning a home but is not able to fulfill his dream as the EMI is much more than what he can afford.

For the higher income group which is not price sensitive in Kolkata, there are at least 15 brands in the real estate industry who are catering to their exclusive demand of a lifestyle living.

The average size for a residential unit for the middle segment is around 1,000 sq ft (Rs 18-20 lakh) while for the premium segment, it is around 1,700-2,500 sq. ft available now in the bracket of 50-70 lakh.

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