For those looking for the price to remain within a limit for a healthy growth it is a good sign, writesG.V. Prasada Sarma
Visakhapatnam Urban Development Authority's auction of residential plots at its Cyber Valley layout from May 16 to 18 has a rather mixed response. VUDA had conducted the auctions in quick succession. The Ozone Valley auction brought plots developed under a land-pooling arrangement with farmers. VUDA reaped a rich harvest with the average price being around Rs.15,000 per square yard and the highest a sharp Rs.19,000 against an upset price of Rs.8,000.
The bids at the auction do not compare favourably with those of the Ozone valley conducted. Buoyed by the response to the Ozone Valley layouts, VUDA had fixed an upset price of Rs.12,000.
After the response to Ozone Valley the buzz in real estate circles was that auction price would shoot through the roof and touch Rs.20,000 a square yard. Such expectations had been belied in the mid-May auction. Against the upset price, the average was 14,853, the highest Rs.17,100 and the lowest Rs.12,100, just Rs.100 more than the upset price. For those looking for the price to remain within a limit for a healthy growth it is a good sign.
“The price did not go beyond a point partly because the upset price itself was steep,” says Confederation of Real Estate Developers' Association of India president K. Subba Raju. However, he was of the view the price at which the plots went was reasonable.
The Ozone valley price shot up mainly because of its location. It has two roads for connectivity and skirted by hills on one side and natural drain is regularised. It has all the qualities required for the development of a township, realtors say.
The Cyber Valley because of its proximity to the IT SEZ and also lot of construction going on including VUDA's mega housing project Harita and thus has the potential to develop faster. Considering these factors, Cyber Valley plots should have been in more demand than those in the previous auction, opines Mr. Subba Raju.
But the two auctions coming up so soon may have had some auction fatigue even if one considers it a good investment option. Of the 145 plots listed for auction, finally only 109 were auctioned and some were taken off the list.