The real estate business saw a drastic fall during the COVID-19 first wave. But it started to revive from February this year, but again received a setback from April with the starting of the second wave. But now it is regaining momentum and business is getting back onto to the rails, said Manmaya Pandab, Deputy General Manager, State Bank of India.
He was addressing the media here on Saturday, after launching the poster and brochure for the seventh edition of Property Expo that is organised by the Confederation of Real Estate Developer's Associations of India(CREDAI). The property expo this time will be held from December 24 to 26 at Gadiraju Palace and Convention Hall, Beach Road.
According to Mr. Pandab, the signs of improvement is encouraging and in the coming few months, it is likely to bounce back. “Right now Visakhapatnam is seeing real estate growth in areas such as Pendurthi, Lankelapalem, Atchutapuram and Madhurwada, and we are not only financing projects but also the leading banker in the home loan segment.” he said.
According to Mr. Pandab, the SBI is financing close to 150 projects, which includes about 15 that was sanctioned post COVID-19 second wave. The financing range from a couple of crores to projects as big as ₹45 crore, he said.
But despite the signs of improvement, the CREDAI officials say that the profitability in the business is shrinking with every passing day, with the steep increase in material cost.
The cost of steel has gone up from ₹35,000 per tonne to ₹65,000, in the last few months and cost of cement per bag has increased by ₹40 in the last two days. “But at the same time we have not been able to increase the selling price,” said B. Srinivasa Rao, chairman of CREDAI.
According to CREDAI president K.S.R.K. Raju, overall there has been an increase by 35 to 40% in the material cost. He said that business was improving and the demand for gated community has been on the rise both from domestic customers and from the NRIs.
Speaking about the property show, the CREDAI members pointed out that there will be no entry fee and about 120 stalls will be set up.
“We will have realtors, builders, home decors and bankers setting up their stalls at the show,” said Mr. Srinivasa Rao.