SAKHAPATNAM: The Port City has emerged as the number three among top 19 tier-II cities on the basis of substantial rate of real estate construction and new launches followed by significant sales, according to a study on realty markets.
Vizag, which is the largest city of Andhra Pradesh – considered to be an end user driven market – ranks just after Kochi and Nashik, which have been positioned as number 1 and 2, as per the latest annual report by analytics firm PropEquity on top 19 tier-II cities of India.
According to the report, 10 key parameters were taken into account to generate the rankings, including price, supply, absorption, inventory, and new launch trends. The study has also looked at execution delays and the size of the market in value terms.
“Visakhapatnam fares well in export-import, shipping, fisheries, petroleum, pharma, and heavy industries sectors. NH 5 traverses through the middle of the city, driving development along it. It is a moderate end-user driven city, and receives sizable outside investment, mainly from nearby towns of AP and also from Puri and Kolkata,” Samir Jasuja, managing director and founder of PropEquity said.
“The size of the market, a critical indicator on the health of the real estate sector in the region, indicates that Visakhapatnam witnessed a 53% jump due to improvement in both the number of units sold and average price of units sold. This region also performed exceedingly well with 41% absorption of residential units implying solid demand for sales. Southern cities of Trivandrum and Visakhapatnam are also best placed among the tier-II cities with only one year worth of inventory in the market. As a consequence, southern region is expected to benefit the most, when the economy picks pace,” Jasuja said.
According to Credai chairman K Ramakrishna Rao said being a port city, it provides a natural advantage to Vizag and the proposed Vizag-Chennai Industrial Corridor along with focus on IT and electronics and this will further boost the prospects of the city.
Regionally, south Indian cities are at the top, followed by west and central India. North India finds itself at the bottom. The top 10 rankings consist of six cities of south India, two from west India, and one each from central and north India.
Interestingly the 19 tier-II cities (consolidated) have a total market size in terms of annual primary sales of INR 326 billion annually, which is lesser than the market sizes of Bengaluru (at INR 361 billion) and Mumbai (at INR 341 billion) respectively.
Overall, the new residential supply in the top 19 tier-II cities has fallen by an overwhelming 64% in the last two years, as against a fall of 40% in top 14 tier-I cities, in the same period.
Residential absorption in the 19 tier-II cities has fallen by 17% in the last two years, as against a fall of 32 % in the top 14 tier-I cities, in the same period. The tier-II markets are clearly end user driven than investor driven. The launch prices of tier II cites increased at an annual rate of 9% over a period of two years compared to 10% for Tier-1 cities.