 Online edition of India's National Newspaper Friday, Mar 06, 2009 ePaper | Mobile/PDA Version |
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Andhra Pradesh
A view of the residential buildings on Beach Road in Visakhapatnam. — The downturn in the real estate sector continues and with the RBI announcing a further cut in its lending rates more relief from banks is expected. But there are other areas in which complaints still exist. For sometime now, the realty sector has been experiencing a stagnant market. Builders feel the prospective buyers should exploit the conditions to their advantage. The global recession has little impact on Visakhapatnam and what is happening in metroe s is not applicable to it, argues P. Anand Kumar, Managing Director of Abhilash Synergetic Constructions and Exports Pvt Ltd. Besides, the market in Visakhapatnam never sold at abnormal profits, he contends. The land cost that peaked during the boom time still appears to be the deciding factor in pricing. The average land cost on the suburbs in in-demand areas like Madhurawada is about Rs.18,000 a square yard and the land cost per sft. of built-up area works out to Rs.1,000, Mr. Anand Kumar estimates. The construction cost with material like vitrified tiles, other amenities like generator and stress on quality is around Rs.850. Adding Rs.300 for labour, taxes and profit, he arrives at a figure of Rs.2,150 an sft. May be there will be some marginal bargain, he says. With big projects on the hold, Mr. Anand Kumar estimates that supply of housing units is much below the demand. It is the opportune time for prospective buyers to weigh their options, he reasons. Low demandThe layout owners also agree that even for plots the demand has seen a fall. “Earlier for every 10 enquiries we used to have six to seven deals. Now it has come to one to two,” says Raja Prasad of Lendivanam, a layout at Rajapulova. However, he attributes any price reduction or offers as desperate attempts by some persons who had relied on rotating the money for real estate transactions. Also, individuals who have purchased at much less price sometime back now may see an opportunity to sell for their own needs. K. Ravi Prasad, CMD of Sree Narasimha Townships, who is presently marketing his fourth venture, Sree Narasimha near Achyutapuram, says during the boom time, the average sale was between 100 and 120 a month but now it came down to 30 to 40. To beat it, he has started offering payments on instalments instead of outright payment. An industry watcher Raj Kothari wants the government to reduce the market value for registration that had been hiked in the boom time. Besides, registration charges for plots also should be reduced as the Karnataka has done it by one and half a percent. - G.V. Prasada Sarma
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