Date:02/06/2008 URL: http://www.thehindu.com/2008/06/02/stories/2008060257800300.htm

Andhra Pradesh - Vijayawada

A setback to builders

K.N. Murali Sankar

Thanks to TRS drubbing, slump in industry to persist

Land prices on the outskirts likely to come down
Look to government for steps to revive industry

VIJAYAWADA: The verdict given by voters of Telangana in the by-elections has made builders and real estate agents in the city jittery. Since the result is not in favour of the Telangana Rashtra Samithi and its advocacy of separate Telangana, builders believe that the existing slump in construction industry is likely to continue for some more time.

The builders and real estate agents pinned their hopes on the election result, expecting that the verdict would be in favour of separate Telangana so that the construction industry in the city could receive a major fillip. They now regard the result as a “major setback” to the industry and predict that the present slump would continue for another three to six months.

‘Unexpected outcome’

“We’ve never expected such an outcome from the by-elections. In fact, this election gave us a lot of hope that it will help revive the industry. Now, we have to wait for a few more months for something to happen,” said G. Raja, a senior builder in the city, on Sunday. Predicting that the land prices on the city outskirts could come down as a result of this verdict, he said there would be no drop in the prices of flats for the next three months.

“It is difficult for the builders to sell their product at a lower price,” he explained.

Echoing a similar opinion, Ch. Sudhakar of Indira Associates said it would take at least six months for the construction industry to revive. “There is no scope for any boom now. In view of the general elections next year, the State government is expected to take some serious steps to save the industry from this slump,” he hoped.

Y.V. Ramana Rao, general secretary of the Builders’ Association Vijayawada, felt that the future of construction industry would depend on the political dynamics. “This verdict will definitely bring a change in the existing political equations. Since all political parties will have to spell out their stand on Telangana within no time, we hope that good days are ahead for the industry,” he said.