Vizag is one among the prominent cities which are in the race to become the capital of the residuary state comprising coastal Andhra and Rayalaseema regions.
For realtors who have been waiting too long for an opportunity to sell their properties ever since people opted for a let-us-wait-and-watch policy, this would be the right time to boost their business. Yet, the Vizag realty market seems to be doing an average business with people remaining in a confusion over purchasing a property or not.
It has been over three months since the central government declared its intention to bifurcate the state in the last week of July this year and yet there has been no major change in the real estate market which has been static for nearly two years now.
Post-recession, Visakhapatnam was among the first a few cities which recovered from the financial troubles and bounced back to witness a boom in real estate market. Its multi-cultural fabric, business and employment opportunities, affordable prices, spacious living spaces and other such factors made the City of Destiny a favourite for investors and also one-time purchasers.
“But the situation is not so encouraging now. People seem to be in a confusion due to the ongoing political turmoil in the state over its bifurcation. Not many people, except for some serious buyers, have the courage to purchase properties as the wait-and-watch attitude is not wearing off,” said Kalyan Choudhary of Kalyana Krishna Constructions.
However, seasoned realtors are attributing this to stagnation in the real estate market where prices are too high for a city which is largely populated by government employees and investors from outside are not showing any interest due to slump in the market. Also construction activity is going on at a snail’s pace as realtors are not ready to risk considering the fact that a large number of flats or houses which have been constructed since 2010-11 still remain vacant.
Land prices shot up and an increasing number of companies including Visakhapatnam Urban Development Authority (VUDA) initiated plans to take advantage of the market during 2011. “Now, there are surplus numbers of apartments than required and they are sufficient for another year unless there is a sudden demand which is unlikely to happen immediately. The sale of plots too is not great due to slump in the market.
Obviously, investors are not ready to invest huge amounts on land unless there is a prospect of good returns in the immediate future,” explained S Ramachandra Murthy, proprietor of Omi Realtors. He pointed out that 41 people opted out of VUDA’s Haritha project recently due to the slump in the market indicating the changing attitude of people.
“There is no major growth in the real estate prices since 2011 except for the core city where prices are escalating due to non-availability of land. Initially, we expected that the market will get a
boost soon after the announcement to bifurcate the state. But the response is not so great, “ said CK Rao, proprietor of Sri Harsha Developers. He said that peripheral areas like Gajuwaka, Pendurthy, Tagarapuvalasa, Simhachalam, Madhurawada, Muralinagar, Madhavadhara, Bheemili, PM Palem and even lands along Vizianagaram are some of the real estate hotspots around the city where land is available in large tracts.
While flats are available for about Rs 2,000- Rs 2,800 per sft in these areas, the prices of flats in the core city ranges between Rs 3,000 and Rs 5,000 per sft. The cost of plots is around Rs 60,000- Rs 70,000 per sq yard in the core city and about Rs 20,000- Rs 40,000 per sq yard on the outskirts. The prices have remained more or less the same for the past one year.
Experts are confident that the city will bounce back over the next 6-12 months. “Unless there is any strong indication of Visakhapatnam becoming a capital of the residuary state of Andhra Pradesh or at least a major government or private project coming up in the city that can boost its growth, we do not foresee any growth in the real estate market. The current scenario can be attributed to the demand-supply theory. Moreover, projects with adequate facilities are in the city but out of the budget for many and though similar projects are coming up within the budget in the outskirts, people do not want to travel for as long as 10-15 km to work,” said BR Srinivas, managing director of Saiteja Constructions.