Gurugubilli Raju, President, Credai-Srikakulam
The bearish sentiment in the Indian realty market is well known to all and Srikakulam is no exception to that. With no specific development plan yet for the city, the realty sector has been impacted with slowing down of the construction activities. The recent announcement by the state government to convert each district headquarter (including Srikakulam) into Municipal Corporation will bode well for the sector, according to CREDAI - Srikakulam chapter president Gurugubilli Raju.
Excerpts of his conversation with Sandeep Pattnaik of Gharabari.com…
Q.1. How the overall sluggishness in Indian realty sector has affected a small city like Srikakulam in the State of Andhra Pradesh? What are the headwinds confronted so far?
Ans. Downtrend in the real estate sector has taken a toll here also. Number of construction in the residential space over the last 2 years has been drastically reduced to a meager 50 to 60 units in 2015. No construction in the commercial space has happened. Interestingly, prices have not come down yet hovering at Rs 1,700 to Rs 3,000 sq ft. in a thin populated city like Srikakulam depending on the area. Issues like higher land prices even as compared to nearest Visakhapatnam prevailing at Rs 25,000 per sq. yrd which resulted into almost over 200 residential flats having no takers and remaining unsold. Higher cement and sand prices are also a worry for realtors here.
Q.2. What about the Municipal Corporation tag to Srikakulam, as the AP Government has announced in the recent past?
Ans. A city to be given a municipal corporation [MC] status, there should be at least 1.5 lakh population among other criteria. In the past, nearby villages within 1-2 km area from Srikakulam have been merged with the city. But objection was raised from a few villages for which the high court has stayed the entire process. It has been made a political issue. The announcement by the state government to convert all district headquarters in to MC is still under discussion. If Srikakulam is accorded the MC status, definitely some positive sentiment will emerge out of that. More residential zones are likely to come up with the expansion of the Srikakulam municipal jurisdiction.
Q.3. Post-bifurcation of undivided AP, what was the impact on the real estate there?
Ans. In absence of concrete development plan by the government, it has impacted a lot on the realty sector her. Where the builders were able to sell at least 3-4 flats per month in the pre-bifurcation period, at present they are struggling to sell even 1-2 flats per month. Confusion prevails among the developers and consumers as well, as to the city development plan, the pricing factor etc. The successful story about land pooling is only a political gimmick. There is no confirmation about the development plan for the city Srikakulam which is around 500 kms away from the proposed Vijaywada - Amravathi capital city.
Q.4. Any recommendation from Credai to resolve the issues lying before the realtors in the city?
Ans. CREDAI has urged the government for quicker building plan approval through implementation of single window clearance (SWC) mechanism within the home area (Srikakulam), besides reducing the price gap of nearly Rs 130 [RSP – Rs 250/-, Market Procurement at Rs 380/-] per cement bag being procured by the builders from the open market.