Apt. Builders saddled with inventory build-up of 20,000 units
An inventory build-up of apartments in Visakhapatnam and its outskirts has come as a sort of boon for those looking to buy flats, as it is keeping developers away from hiking property prices for the moment.
However lay-out developers in this region were quick to hike prices of plots by 20-30 per cent, after the AP Assembly, on January 20, passed the bills that pave the way for the State to have three capitals. But, developers of commercial and residential flats in and around the city are however refraining from doing so, as they are saddled with an inventory of between 15,000 to 20,000 unsold new flats.
“All our focus is on clearing this unsold inventory, which will make room for liquidity, and only after this can we think of hiking prices of the new projects that are coming up. I think any kind of price increase could happen only after five to six months,” Mr B. Srinivasa Rao, president of the apex body CREDAI’s Vizag unit, told Vizag Industrial Scan.
As per industry sources flat prices in Visakhapatnam region, including Rushikonda, Madhurwada, Yendada and Kapullauppada range between Rs 3,000 to Rs 7,000 per sqft. While in the city it is being stated that prices have escalated to Rs 9,000 per sqft.
Real estate developers say that the location to watch for in the coming months will be Bheemunipatnam, as it is being touted to be in proximity to the new secretariat in the Chief Minister Mr Jagan Mohan Reddy’s three-capital formula. Under this formula, Vizag will be the executive capital, while Vijaywada and Kurnool will be the legislative and judicial capitals respectively.
“The passing of the decentralisation Bills in the Assembly has, doubtless, sparked off enquiries for new flats from several State Government departments such as the Labour and Intelligence departments. They have started to scour for residential property in the light of the decentralisation proposal,” Mr Srinivasa Rao said.
One thing that will stand the builders in good stead is the availability of land banks for new projects in the future. But this again will depend on how quick and efficiently the government will be able to grant access to land for the builders.
Vizag is estimated to be home to about 700-800 builders and with the announcement of executive capital the city is set to see the entry of other big names from Hyderabad and Mumbai.