To buy or not to buy in Kolkata: Shouvik Sarkar, Agency 2017

The once-bastion of intellectual thought capital and leadership ‘Kolkata’ last saw credible investment in the form of Kolkata’s Sector V shaping up, with IT players like HCL Technologies, Capgemini, Tech Mahindra, Wipro, IBM, TCS amongst others and with a significant influx of skilled migrants to this business district.

For a generation displaced from West Bengal due to lack of opportunities or unable to muster enough gumption and enterprise towards entrepreneurship, who are now in their middle ages, and planning for the years ahead, the big question that arises for these set of of buyers is whether ‘To buy or not to buy in Kolkata real estate’.

Shouvik Sarkar, founder of Agency 2017
Shouvik Sarkar, founder of Agency 2017

To my mind, the 2000s would have seen one of the largest working population exodus in search of better opportunities/salaries. Surprisingly, West Bengal today ranks 5th today in the ‘Ease of Doing Business’ polls, which incidentally is led by Andhra Pradesh. The polls are conducted by the Department of Industrial Policy (DIPP) and The World Bank, which cumulatively add scores on ‘reforms undertaken’ and ‘user feedback’ – the latter is where Bengal slips up rather heavily. Only West Bengal has had the inexplicable deviation from RERA norms, setting up its own West Bengal Housing Industry Regulation Act – with large digressions: For instance, there is a complete removal of the clause that penalises or holds accountable any developer, on non-completion of project, due to unforeseen circumstances.

Refer Kolkata data. Only 5% of Grade 1 city/urban residential sales. While the percent change is a large delta, it is no commentary on real sustainable uptick. Hyderabad HAS shown signs of recovery, albeit on negligible price hikes/stagnant prices – and have been observing this market closely for the last 3 years, bulk of the transactions in the sub/OR INR70-80 lac range, there is significant potential yet.


Coming back to the moot point, for the most part, the middle age generation and 40 plus, making a living in various parts of India and the world – have possibly septuagenarian (or close) parent/s at home, tended to by a litany of loyal domestic helps. Ancestral property aside (which could be in great locations but with antiquated construction and in need of repairs), there is also a tacit, subtle price benchmarking that is happening in central/posh Kolkata – Park Street, Park Circus, The Eastern Metropolitan Bypass, Tollygunge, South Kolkata – which by default takes property prices to a degree which no longer remains within middle-class reach. This has happened unequivocally, unchecked, unabated across cities – Mumbai, Delhi being prime participants – where the middle class is gradually shunted out to the suburbs. And this is not really the survival of the fittest – it is the creation of parallel ecosystems, cities (think Powai, Mulund, Thane, Navi Mumbai, New Town, Gurgaon, Noida) and urban townships by pricing control. The unfortunate truth is that that the infrastructure to support the ancillary townships, being largely government/nodal bodies driven – is at least a decade behind
true requirements.

Simple statistic: About 1 crore people are moving to urban areas every year, on an average. And, thus the PMAY announcement of Housing for All by 2022, with the mandate of 20 million households/2 crore homes is ambitious, but infra has a lag of at least a decade, if not more.


This is fodder for a separate article, but here’s a fundamental reason as to why an emotional purchase of a residential unit makes less sense than investing in a commercial unit in one of the burgeoning cities in India. Or for that matter, a smaller residential unit in a market where demand for homes outstrips quality supply and not the other way around.

Simply by doing the math AND search around Grade A commercial in Tier 2 upcoming cities, say Hyderabad, Pune – one can offset EMIs altogether, with the rent earned.


For bulk of the middle-class working gentry whose source of income is a salary base + mutual funds + gold (which now has lost its sheen, albeit temporarily), real estate ought to be separated from being a large emotional purchase and thus be a value creator. My advice to my peers: Rather than lock oneself into a large illiquid, slow-moving asset class (residential, Kolkata), look at value creation through higher-yielding assets and liquidate if and when necessary. One would think that the price movement of a ready-to-move-in residential unit in Kolkata clearly is unlikely to outstrip a commercial asset of similar value in a city with higher infra and capital infusion promise. And that makes more sense in the long run.

[This is an authored article by Shouvik Sarkar, founder of Agency 2017. All views, opinions and expressions are personal and limited to the author. Mr. Sarkar can be reached at]