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Sunday, July 21, 2024

Assessing the Real Estate Landscape in Vizag for 2023

The real estate sector in Vizag faced challenges in 2023, but experts anticipate growth in the coming months, particularly in the luxury housing segment on the city’s outskirts. Despite rising housing prices in Vizag city and surrounding areas, the slowdown in 2022 had various contributing factors.

Real estate developers and financial institutions are cautiously optimistic about the sector’s potential due to a slight uptick in demand for luxury housing. Expectations were high that key government offices, including the Chief Minister’s Office (CMO), would relocate to Vizag by 2023, boosting the real estate sector. However, this anticipated boost has not materialized, leading to some disappointment.

NRI investments in properties have seen a decline, contributing to the sector’s mixed response. President of CREDAI-Visakhapatnam, V Dharmender, noted a significant trend of increased demand for luxury homes in Vizag city, characterized by branded developments, prime locations, exclusive amenities, and advanced conveniences.

Despite numerous residential projects being launched annually in Vizag, the majority are small-scale. The prices of flats, especially in the 3 BHK category (1,200 to 1,400 sq ft), have surged by 30 to 35 percent on the city’s outskirts and by 50 to 60 percent in the city core over the past five years. Approximately 15 percent of the city’s housing comprises luxury apartments.

In contrast, demand for regular flats has been tepid in the Vizag region, with prices ranging between 5,000 and 6,000 per sq ft on the outskirts. The middle-income group, constituting around 50 percent of the population in Vizag, faces challenges in affording homes, as the cost of an affordable flat (1,000 to 1,200 sq ft) on the outskirts exceeds 50 lakh.

Realtors have justified price increases citing various reasons, but the city’s revenue sources remain low. The affordability gap among the middle-income groups has impacted demand, with lukewarm interest in many projects in Vizag, according to a reputed realtor and expert in the local real estate sector. One IT professional, Siva Kumar, highlighted the challenge of investing at least 85 lakh for a decent 3-BHK flat on the outskirts of Vizag.

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