For the last five years, the real estate sector in Tirupati is in a state of paralysis. The turnover suffered a huge setback, in terms of volume as well as value.
The Telangana agitation at its final stage, the bifurcation blues and the demonetisation exercise cast a shadow on the industry, but it was the GST, of late, that added to the confusion. However, the construction sector remained largely unaffected as an estimated 85% of transactions are done through housing loans.
Real estate in the eastern Tirupati witnessed a spurt since 2010, thanks to the development of Renigunta International Airport, NTPC-BHEL Power Projects Limited at Mannavaram and several educational institutions that sprouted on Karakambadi Road. After touching a peak, the prices faltered and reached a state of stagnation during 2013-15.
Though the Indian Institute of Technology (IIT) and Indian Institute of Science Education and Research (IISER) are set to be located on sprawling campuses totalling 500 acres on the Yerpedu-Venkatagiri highway, the inordinate delay in translating the plan from paper to the ground took a toll. Development along the Rayala Cheruvu Road on the south suffers for want of infrastructure and connectivity. There is absolutely no development beyond SV University campus on the west, as ventures on the Chittoor and Madanapalle highways are waiting for takers.
GST era
Reverse charge mechanism is a major problem in the GST era. For transactions beyond ₹5,000 from unregistered dealers, one has to pay the tax and get input credit. “We regularly face this problem with respect to payments made to labour and workforce,” says Rajasekhar Gupta, secretary of CREDAI's Tirupati chapter. The issue is now on the back burner up to March 31 after a decision was taken on it in the last GST council meeting.
Another major area of concern is the Real Estate Regulatory Authority (RERA) Bill. Though it was passed, no authority has been formed by the State for its enforcement. The market is currently witnessing only resale of existing plots, with no value addition. New real estate ventures, which have to invariably get themselves registered under the Bill before taking up promotional activities, are waiting for light to emerge at the end of the tunnel.
TUDA Chairman G. Narasimha Yadav, who held a meeting with CREDAI members recently, assured to develop master plan roads that have the potential to become growth engines.
