Flats to cost a bomb

Visakhapatnam: Just when apartment builders found respite from sand scarcity, with the state government streamlining mining of sand, the hike in steel and cement prices has come as an unexpected blow. With the new steel and cement prices they would either need to suffer the loss or pass on the additional costs to the apartment buyer.

With the hype created around Smart City aspects, real estate prices have already gone up manifold. Over a year, the apartment prices have gone up at least double in certain parts of the city. An SFT rate, which was between Rs 2,500 and Rs 3,000 at Visalakshinagar, is now selling at between Rs 4,000 and Rs 4,500.

Though, some of the prospective buyers, have adapted  wait and watch policy on the hopes that the real estate bubble will burst as it happened in other cities in the country, the apartment builders are not willing to budge and lower prices since they cannot sell at losses.

Apart from the increase in raw materials, high land prices are prompting builders to hold on to prices. With the latest increase in cement and steel price the variation will be of the range of Rs 300-400. For a 1,000 SFT two bedroom flat, it means an increase by at least Rs 4,000 straight.

“We were all actually relieved that sand mining has been streamlined and now raw material is available at affordable price. But this new price of cement and steel is definitely worrisome. We can’t change price to those who have already booked the flats,” said Sunil Srinivas, an apartment builder.

Local civic body is yet to get the funds and start works on the proposed plans under Union Urban Development Ministry’s Smart City initiative, but the realtors, especially apartment builders hiked the prices of flats.

Cashing on the situation, apartment builders have increased prices, especially in areas such as Sagar Nagar, Endada, Kapulauppda, Adhibhatlanagar, Madhurawada, PM Palem, Paradesipalem, Kommadi and other areas.