Demand for rental housing, commercial space plummets in Vijayawada

Vijayawada: Demand for rental housing, flats and commercial space has plummeted in Vijayawada city.

According to rental agencies, the uncertainty over capital city, stoppage of works at Amaravati capital region and recession in market are the chief reasons for the decline in demand for houses on rents. It indicates fall in real estate sector. Rents have declined by 15 per cent in the city.

In fact, the rents in Vijayawada are higher when compared with any other city in Telugu states. This is despite employment opportunities are minimal in the city. Rents are fixed by calculating total construction costs of a building and land cost. It leads to fixing of higher rents.

There was rise in rents following the announcement that Amaravati as the capital city and shifting of employees from Hyderabad to the city. Several offices were set at various locations in the city.

The building owners increased the rents abnormally as the demand for housing increased. It may be recalled that former chief minister N Chandrababu Naidu in those days requested the building owners not to increase the rents.

Now the situation is different. As per the reports, there is a recession impact on various businesses. Apart from this, a large number of private employees and contractors vacated their rented houses as the construction of Amaravati capital city coming to a halt.

Several commercial buildings are vacant at various centres in the city. Many city-based industrialists constructed commercial complexes recently taking into consideration of Amaravati capital city and future demand.

But there is no demand for them, said N Venkateswara Rao, who recently cancelled an agreement with the top infra company in the city as the company downsized the staff and shifted the office. He said that he got Rs 1 lakh monthly rent for his two-storeyed building during the last three years but now his building is vacant for the last four months.

T Charles of the Deepti rental agency said now the rental agencies have lost business. Speaking to The Hans India, he said he had never faced this kind of situation during the last 18 years.

I Venkata Durga Rao, owner of Pawan rental agency, said that they used to secure four assignments monthly and at least receive two inquiry calls a day. The market trend has reversed, he said. Nearly 2,000 flats remain vacant in the city, he said.