Realty bubble waiting to burst?

Property registrations in Srikakulam, Vizianagaram districts dip. With prices almost remaining constant, builders are now focussing on disposing the layouts they have.

File photo of multi-storied building under construction.

The much-expected realty boom in Visakhapatnam and its neighbouring coastal districts post-bifurcation appears to have turned out to be a bubble as the business and pricing have not seen any abnormal growth. In fact, property registrations in Srikakulam and Vizianagaram districts have dipped significantly.

There are hundreds of layouts on Visakhapatnam-Srikakulam and Visakhapatnam-Vizianagaram routes. Speculations were rife that Vizianagaram and Srikakulam district would see a realty boom if Visakhpatnam was made capital. But, the euphoria was short-lived with the government indicating its keenness in developing Guntur-Vijayawada as capital.

At present, realtors are focussing on selling the units in Visakhpatnam city only. “Visakhapatnam has been attracting buyers and experiencing a steady growth,” says newly-elected Chairman of Confederation of Real Estate Developers’ Associations Andhra Pradesh, K. Subba Raju, while explaining the market trend here. During the last two to three months, registrations in Visakhaptnam have gone up by 25 per cent, he says.

With prices almost remaining constant, builders are now focussing on disposing the layouts they have.

It is learnt that prices may go up by Rs. 200 to Rs. 300 per sft, depending on demand. Despite drop in transactions last month, Registration department hopes to meet the targets set for 2014-15 financial year. A target of Rs.151.82 crore has been set for Vizianagaram while it is Rs.102.48 core for Srikakulam district.

Revenue collections

Revenue collection figure has not been so encouraging. In Vizianagaram district, Rs. 75.54 crore was collected when compared to the target of Rs. 151.82 crore in last fiscal, while in Srikakulam, the collection was put at Rs. 46.88 crore against the target of Rs. 93.04 crore, say officials. However, realtors are optimistic over the growth.

“The prospects are bright but what we need is an impetus for quick growth,” says CREDAI Visakhapatnam Chairman B. Raja Srinivas. “As of now, we are witnessing a flurry of enquiries over the layouts, mostly from people working in Hyderabad and it needs to translate into business,” says M.S. R.B Raju, a builder from Vizianagaram.