Apartment construction costs soar in Vizag city

Visakhapatnam: Construction cost of apartments went up to Rs 500 per square feet in Visakhapatnam and this could lead to a decline in the profit margins of builders.

“Though cement prices remained static, the cost of steel, plumbing material, paints, electrical goods and sanitary ware as also other finishing products went up since March this year. Even the labour charges have increased from Rs 180 per square feet to Rs 280 per square feet,’’ said B. Srinivas, Vizag chapter president of CREDAI.

Talking to Deccan Chronicle, Srinivas said currently some 1,500 to 2,000 projects are under construction and around 7,000 units would be ready in another two years. The cost per unit is of the order of Rs 4,500 per square feet in Yendada, Anandapuram and Madhurawada and upto Rs 10,000 in Visakhapatnam urban areas.

The builders cannot hike the prices of the units that were booked by customers at the time of the project launch. Profits can be earned from un-booked flats, the prices of which can be hiked as per the increase in the cost of construction, Srinivas stated.

On behalf of the CREDAI, an appeal is being made to the government to regulate the prices of building material including sand, cement and steel,” he said.

A builder said the market has slowed down as the middle segment purchasers in the city cannot afford to buy new double bedroom flats that cost around Rs 1 crore. Even the cost has gone up in Yendada and Madhurawada areas where only 3 BHK units are being constructed with prices ranging from Rs 1 crore to Rs 1.5 crore.

“The only option for the people is to buy flats in Anandapuram and Bheemili areas where they can get a rent that matches half the monthly EMI price,’’ the builder said.

The number of applications for housing loans has come down by 50 per cent, said Neelamadhav Padhi, who heads the branch of a leading corporate bank here.