New Investments and GST Cuts Revive Vizag Real Estate Market
Visakhapatnam: The real estate market in Visakhapatnam (Vizag) is witnessing a resurgence of hope and activity. The coalition NDA government in Andhra Pradesh has announced significant projects for Vizag, including the allocation of land parcels to five IT companies. These projects, with a projected investment of Rs 19,000 crore, aim to create employment and position Vizag on the global digital map.
The real estate developers in the Vizag region are optimistic about a revival in demand for housing and office spaces in the coming months. This optimism is fueled by a series of investments that are reversing a prior decline in the sector. According to E Ashok Kumar, President of the Confederation of Real Estate Developers' Associations of India (CREDAI), Visakhapatnam Chapter, the recent announcements by the NDA government have created positive vibes and confidence-building measures for the development of Vizag city.
Housing sales in Vizag city and surrounding areas had dropped by around 20 per cent in 2024 due to various reasons, including general elections. The proposed IT projects, a steel plant in Anakapalle district, and the greenfield Bhogapuram airport are expected to create employment in Vizag regions and drive demand for property investments.
The reduction in GST on construction material from 28 per cent to 18 per cent is another significant factor. This reduction will lower construction costs, making housing more affordable for buyers. E Ashok Kumar added that the state government has approved VMRDA's development of seven new roads to ease vehicular traffic on the national highway connecting the greenfield airport at Bhogapuram. These roads will be constructed in Bheemili, Anandapuram, and Bhogapuram, contributing to infrastructure development and boosting the real estate sector.
With land for real estate projects becoming scarce in the core areas of Vizag city, some developers are focusing on high-rise constructions at the city's outskirts. The city skyline is expected to change significantly in the coming years. Real estate growth in a city is directly linked to employment generation. The recently announced IT and manufacturing projects in Vizag region will create jobs and push real estate growth.
The GST reforms are positive news for affordable housing. The reduced construction costs, if passed on to homebuyers, can boost demand in these segments in the coming months, said Dharmender V, chairman of CREDAI Vizag chapter. With the GST on construction material cut to around 18 per cent, the construction cost will come down by 5 per cent, providing some relief to buyers.
Employment generation across various sectors is expected to significantly influence real estate growth in Vizag city, a local real estate businessman noted. Apart from high-rise constructions, residential complexes for middle-income groups with 2 and 3 BHK flats are coming up at various locations in the city. A vibrant economy is key to the development of any locality as it provides wealth, numerous opportunities, safe and healthy neighborhoods, and supports the funding of key infrastructure and services.
