Ready to start a family, Abhigyan Bose has been on the lookout for a house. Every time the young professional was about to strike a deal, interest rates edged up a notch and he had to rework his budget.

Just when Bose thought he had figured out how to cope with the rate hikes, he was hit by a bolt from the blue: he had been paying no attention to a surge in property prices that have been creeping up on the market.

“I cannot find any decent flat in the city proper for less than Rs 25 lakh. Where will the middle class like us go?” asks Bose.

Residential property prices have moved up in Calcutta to a level never seen in recent times.

Homebuyers should be prepared to dig deeper into their pockets if they want to buy a 1,000-1,200-sq-ft flat in Calcutta from developers of some repute.

Most of the city has witnessed a rise of Rs 200-500 per sq ft in 2007. In some pockets, the rates zoomed by as much as Rs 2,000 a sq ft.

City developers blame high land prices for the spurt. “Look at the rate the Calcutta Municipal Corporation is expecting on the Eastern Metropolitan Bypass. The civic body is setting benchmark for land deals within the city,” says Pradip Chopra, the director of P S Group, a city-based developer.

According Chopra, land in central and south central Calcutta is not available below Rs 70 lakh a cottah. “In order to make money, the developer will price it above Rs 7,500 per sq ft,” he notes.

Incidentally, some transactions in ready to move property from good project is already fetching Rs 7,000-7,500 a sq ft.

Areas south of Park Street — Loudon Street, Theatre Road, Queen’s Park, Sunny Park, Gurusaday Road, Ballygunge Circular Road, Ballygunge Park Road — have seen prices going up from Rs 4,500-5,500 a sq ft to Rs 6,000-7,500 a sq ft in the past six to eight months.

Alipore, a favourite haunt of the rich and the famous, is also seeing deals at Rs 6,500 a sq ft.

In fact, few tracts of property are available between Shyambazar and Jodhpur Park for less than Rs 2,000 a sq ft.

For homes below Rs 20 lakh, the hunt will have to concentrate on the southern outskirts like Garia and Narendrapur or on the northern fringes like BT Road and Jessore Road.

Are Calcuttans ready to pay big bucks for the dream house? Are the measures announced by the Centre to cool off property prices across the country failing in the city?

No, says an official with a private sector bank. “There is resistance at this level. Developers are quoting list prices but I am not sure if transactions are taking place at these rates,” he points out.

Another bank official adds that high interest rates have halted the rise in property prices.

“With the rise in interest rates, eligibility for home loan has become more difficult. It has affected the business community more than salaried professionals. The salaried got raises and as a result, their eligibility did not go down. That is not always the case with businessmen,” he says.

According to him, prices in some pockets at Haridevpur, Harish Mukherjee Road, Phool Bagan, VIP Road and Joka have gone down marginally.

People are wary of investing in property except Rajarhat. High interest rates are acting as a deterrent. But observers say that real estate demand in Calcutta is driven more by actual users than investors.

While residential rates are rising, can commercial properties be far behind? No says, Abhijit Das, head of consultancy Trammel Crow Meghraj.

Within the central business district area, rents have grown to Rs 100 a sq ft from Rs 50 in the past one year. In Salt Lake Sector V, rents are as high as Rs 45 a sq ft. “There is little supply in the market. So every available piece of property is being lapped up,” Das points out.