Capital status set to result in realty boom in Vijayawada
The Andhra Pradesh government’s announcement declaring Vijayawada as the new capital of the state is likely to result in a realty boom in the region. The government had declared that the stretch between Vijayawada and Guntur would be utilised for developing the new capital. This includes key government institutions as well as other important facilities like schools, colleges and hospitals. Even though this is a long-term process, prices in the region have already started appreciating in the Vijayawada-Guntur region in anticipation of the capital being located there.
Many areas in Krishna district within a radius of about 25 km from Vijayawada saw prices doubling in the last two months. In fact property prices in the Vijayawada-Guntur region started moving northward since the division of the State was announced. In many areas in the region, land prices which were about 1 crore per acre prior to the capital announcement saw prices skyrocket to about about 4 crore. Going by this trend, it is expected that prices will move even further up in the days to come.
Areas that witnessed major land price appreciation
Many areas in the region have already witnessed steep appreciation in prices. Some of these are Gannavaram and Guntur, among others. Average land prices in Gannavaram which were about Rs 900 per sq. ft. at the end of 2013 have shot up to about Rs 4600 per sq. ft. in the succeeding six months. This is an appreciation of a whopping 411 per cent. Incidentally, the upper limit for land prices here was an astounding Rs 11,520 per sq. ft. Guntur also recorded steep appreciation in land values. Land values which were about Rs 1,600 per sq. ft. in Q1 2014 jumped to Rs 1,850 per sq. ft. at the end of Q2 2014. This is an appreciation of about 15 per cent.
Challenge for government
Following the announcement, demand for land has reached unheard proportions. The frenzy for buying land was so high that the government had to intervene. It banned the sale of land that was being used for agricultural purposes or their conversion into residential plots. Considering the rate at which prices are increasing in the region, the government is expected to face an uphill task in it pursuit to acquire land for developing the new capital.
