Organised developers in Calcutta held back from launching projects in the first three months of 2019, bucking the national trend that saw a healthy rise in new projects.

Launches in the January-March 2019 period were down 75 per cent from the October-December period of 2018 even as seven other major cities saw an uptick of 27 per cent (see chart). Compared with the corresponding January-March quarter of 2018, new projects dropped 85 per cent in Calcutta against a 91 per cent rise in the seven cities.

Anarock Property Consultants, which came out with the report, attributed the diverging trends to the cautious approach of the local developers in the midst of unsold inventory and the upcoming general elections.

“Calcutta’s developers have been cautious in deploying fresh supply because they need to focus on completing ongoing projects. They can only develop as much as the demand actually justifies,” Anuj Puri, chairman of Anarock, explained.

The city market is also usually more politically sensitive than the rest of the country and the pre-election lull, Puri argued, appeared to be more acute here.

Sales, in the same periods under review, however showed resilience. Organised players sold 4,020 units in January-March of 2019 compared with 3,860 units in October-December, a modest 4 per cent rise. Compared with the same quarter of 2018, the uptrend is rosier at 18 per cent as these developers managed to offload only 3,420 units last year, the Anarock report said.

Harsh Patodia, president elect of builders’ national body Credai, attributed the lull to the regulatory changes. “We were all busy getting the ongoing projects registered under the West Bengal Housing Industry Regulatory Authority (WBHIRA). It was a massive exercise to align the entire team with the new rules and regulation. Hence, launches were low,” said Patodia, who’s the chairman and managing director of Unimark, a co-developer of Trump Tower in Calcutta.

According to him, launches will be tepid in the current quarter too as the state goes through a seven-phase election. Buyers will be on a wait-and-watch mode and the focus of the consumer may not be on new projects. “Some major changes have happened. The GST rate is finalised. Hira has been introduced. Business wants stability and predictability, which is now here,” he said.

Nationally, sales were up 12 per cent over the preceding quarter and 58 per cent on a year-on-year basis. Higher sales than launches would have a positive impact on the balance sheet of the developers, signalling liquidation of unsold inventory from the ongoing projects. “This would translate into better cash flow for the builders,” a real estate observer said.