Vizag Real Estate Sector Rebounds with New Investments and GST Cuts
Visakhapatnam: The real estate sector in Visakhapatnam is experiencing a much-needed revival following the announcement of significant projects and the reduction in GST on construction materials. The coalition NDA government in Andhra Pradesh has allotted land parcels to five IT companies, including data center projects, with a projected investment of Rs 19,000 crore. These investments are expected to create employment and position Visakhapatnam as a global digital hub.
The real estate developers in the Vizag region are optimistic about the future, anticipating a surge in demand for housing and office spaces. The GST reforms, which cut the tax on construction materials from 28% to 18%, are seen as a major positive step. E Ashok Kumar, President of the Confederation of Real Estate Developers' Associations of India (CREDAI), Visakhapatnam Chapter, expressed that the reduction in construction costs will make housing more affordable for buyers.
Housing sales in Visakhapatnam and surrounding areas had dropped by around 20% in 2024 due to various factors, including the general elections. However, the recent announcements by the NDA government have generated positive vibes and confidence among developers. The proposed IT projects, a steel plant in Anakapalle district, and the greenfield Bhogapuram airport are expected to create numerous employment opportunities, driving demand for property investments.
The state government has also approved the Visakhapatnam Metropolitan Regional Development Authority (VMRDA) to develop seven new roads to ease vehicular traffic on the national highway connecting the greenfield airport at Bhogapuram. These roads, which will be constructed in Bheemili, Anandapuram, and Bhogapuram, will enhance infrastructure and further boost the real estate sector.
With land becoming scarce in the core areas of Visakhapatnam, some developers are focusing on high-rise projects at the city's outskirts. This shift is expected to change the city's skyline in the coming years. The growth of the real estate sector is directly linked to employment generation within the city limits. The recently announced IT and manufacturing projects in the Vizag region will create jobs and push the real estate market forward.
The GST reforms are particularly beneficial for affordable housing. Dharmender V, chairman of CREDAI Vizag chapter, noted that the reduced construction costs, if passed on to homebuyers, can significantly boost demand in these segments. With the GST on construction materials cut to around 18%, the construction cost is expected to decrease by 5%, providing relief to buyers.
Employment generation across various sectors is expected to significantly influence real estate growth in Visakhapatnam. 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, providing wealth, opportunities, safe and healthy neighborhoods, and supporting the funding of key infrastructure and services.
