Cyclone scares realty sector in Vizag

VISAKHAPATNAM: The massive devastation caused by cyclone Hudhud in the city appears to have taken a toll on the realty sector, for the investors are rescheduling their plans this year.

Even as the Central government proposed to develop a 'Smart City' in Vizag and the state government proposed to develop the IT and ITES sectors, small and medium investors seem not interested in investing in the projects in and around Port City for various reasons including sluggish market, sand scarcity and inordinate delay in deciding on the new capital city. But, the cyclone had left a bitter taste in their mouths.

Soon after the TDP came to power in the state, many small, medium and large-scale real estate enterprises and individuals shifted their focus to Krishna, Guntur and Prakasam districts. However, the announcements made by chief minister N Chandrababu Naidu, Union minister M Venkaiah Naidu and others about proposed universities and IT/ITES sops did not bring about a change in the real estate sector.

'Already, the focus has shifted from Vizag to Krishna and Guntur. Hudhud impact will be only temporary. Once the capital city and related plans are finalised, a boom is expected in the sector.

Though 'Smart City', Metro Development Authority and IT companies are all good signs, we have to probably wait till the first quarter of the next financial year,' opines CREDAI Vizag chairman B Raja Srinivas.

Meanwhile, there are no buyers for flats and apartments in the Bay City because of which builders are in a financial crisis. According to the chairman of Lakshmi Sai Builders, the middle and salaried income group people are postponing their plans to buy a flat, post-Hudhud. At present, only those wanting to reside in flats are purchasing them. Hence, there are no investment transactions, he added.

'More transactions will happen when there are investors. The realty sector in and around Vizag did not witness a steady growth. There was an abnormal hike in the land price between 2004 and 2009, but no growth in industrial, hospitality, tourism and education sectors. People who bought land for higher price earlier, are now in a fix.

Adding to this, the T-movement followed by bifurcation and elections killed the prospects of real estate,' said Ch Ganapathi Raju, an experienced realtor.

Hudhud proved that civil constructions were very strong here. No RCC building was affected by the cyclone. However, the real estate was badly hit by scarcity of sand and other issues, Raja Srinivas added.

'Good rail, road, air and harbour connectivity certainly triggers a boom in the realty sector, but not anytime soon. Meanwhile, unnecessary hype is proving to be unhealthy for the market. A real picture will arrive by mid-2015,' he added.