Rising prices does not dampen demand for flats in Vizag

Despite rising prices, there has been an increase in demand for flats in Visakhapatnam in the last four months. Prices have increased by 80-90 per cent as compared to last year.

The builders, who till the last year, were finding it difficult to sell residential flats, are all smiles now, for even before they begin the construction, almost all the flats get booked.

Builders are now able to sell their flats at between Rs 1,200 and Rs 1,400 per square feet without much difficulty. In places like Seethammadhara, Balaji Sastry layout, MVP and beach roads, prices have touched Rs 1,450 per square feet.

Chairman of Apartment Builders Association, Visakhapatnam, K Subba Raju attributed the demand for flats due to several initiatives undertaken by the state government to develop Vizag.

"Various initiatives of the state government like development of Medicity in 100 acres, and Textile park in 1,000 acres of land are going to increase the demand for flats in Vizag. Besides, major IT companies are planning to set up their centres and also some major and medium industries may come to the city. This will generate huge employment opportunities and the city will further see a growth in the flat culture," he said.

"But compared to Hyderabad and Bangalore our rates are quite cheap as we still sell at around Rs 1,500 per square feet," he added.

A year back, sites for residential flats were available at Rs 6,000- Rs 8,000 per square yard but now it's impossible to get them below Rs 15,000 per sq yard within the city limits.

Although the construction material costs have increased significantly, which is one of the reasons for the increase in the flat rates, buyers are queuing up for flats.

"Last year, we purchased steel at Rs 18,000- Rs 21,000 per tonne whereas now we are paying Rs 27,000- Rs 29,000 per tonne. Besides, cement prices too have increased from Rs 95- Rs 105 to Rs 120-Rs 125 per bag while the hardware and sanitary equipment costs have increased by 30-40 per cent. Owing to these reasons, our construction cost has been hiked by Rs 450 per square feet," Chandran, a leading builder in the city said.