VISAKHAPATNAM: The real estate sector of Visakhapatnam, which is slowly recovering from bifurcation blues and Hudhud horror, is in for another knockout blow. The prices of new flats in the city are expected to witness a hike of `200 to `300 per sft due to escalation of construction costs including the increased prices of cement and sand. Realtors are in doldrums as they can neither bear the additional costs nor pass it on to the customers.
For over a year, Visakhapatnam has been witnessing a sluggish market because of uncertainty due to state bifurcation followed by apprehensions over the future of the city after Vijayawada-Guntur region was chosen as the future capital of truncated Andhra. As a result, there were not many takers for flats in Vizag, pushing realtors into financial crisis. It was only after the Centre annouced that Vizag would be developed into a smart city that things started to look up.
“The middle and salaried income group people are postponing plans to buy flats especially in the aftermath of Hudhud. And the hike in sand prices has come as a deadly blow,” said Ch Ramakrishna of SV Builders. He said that enhancement of the property price by `200 to `300 per sft is inevitable.
In July this year, cement companies have increased the prices by 25-35 per cent. Real estate developers say that though the hike in cement prices is an additional burden, it was not passed onto the consumer entirely. But the state government’s new sand policy is pushing them to take the drastic step. At present, only those who are keen on residing in Vizag are purchasing flats/residential houses. There are no investment transactions, which are crucial for the growth of the realty sector’s.
“The hike in sand price and transportation costs will increase the cost of a lorry load to `35,000. The government has been misguided in fixing the new prices and it would result in an additional burden of `200 per sft for those in real estate,” said B Raja Srinivas, chairman of CREDAI-Vizag chapter.