Vizag land prices soar, and it’s not just Volkswagen!

Font Size

Print

Feedback

Email

Discuss

Visakhapatnam, March 4: Say Volkswagen, (VW) and real estate prices soar in Visakhapatnam. But land prices here are not just about the VW or its plant plans. A host of other variables like VRS, NRIs, Telangana statehood campaign, ITES factors and team up to push up prices in Vizag. Realty prices for both residential and commercial properties have been going up significantly in the last three years. The cost of apartments have gone up by 30-50% from Rs 800 per sq ft to Rs 1,200 in the city. In the not so up-market areas too, it rose from Rs 600 sq ft to Rs 950. Land prices here in tyhe city are now quoted around Rs 10,000 per sq yard and above from an earlier Rs 3,000-4,000 per sq yard.

On the outskirts, in the Vizag-Parawada corridor -on the National Highway after the Visakhapatnam Steel Plant - land procurement started first for NTPC’s Simhadri Power Station in 1994 starting at Rs 2.25 lakh per acre. This was followed by procurement for the setting up of the Special Economic Zone (SEZ) about four years ago starting at Rs 3 lakh per acre and finally closing at Rs 4 lakh. But within nine months, it rose to Rs 10-15 lakh per acre and in some instances, even Rs 20 lakh. Over three years ago, a number of public sector employees opted for a voluntary retirement scheme (VRS). And, Vizag has a good number of PSUs.

Flush with cash, they invested in real estate as a secure and appreciating investment. Around the same time, general interest rates and provident fund interest rates too declined from 12.5% to 8%. There was also a sudden inflow of NRI funds which found its way into real estate.

The formation of Pharma City on the outskirts and the emergence of Telangana Rahstra Samithi (TRS) with its frequent announcements of a separate state deadline has pushed many investors to Vizag thus accentuating the situation.

“This was bound to happen. However, there won’t be any allied industries around the SEZ as many believed, which pushed up prices initially. Now, they are at a realistic level of Rs 10 lakh per acre,” explains Krishna Rao, a real estate agent.