Vijayawada witnesses stabilization in land prices
The ripples created in the realty sector of Krishna and Guntur districts following the decision to make Vijayawada the capital of Andhra Pradesh are fast dying down. Land prices in the region which were quoted exorbitantly in the aftermath of the capital decision have stabilized considerably in recent times. This phenomena was especially evident in areas like Gannavaram, Amaravathi, Mangalagiri, Nuzvidu and Nandigama which had formerly witnessed a real estate boom with land prices skyrocketing following the bifurcation of the State and the announcement of the capital.
Buyers adopt cautious approach
In the wake of the realty boom, many realty builders, developers and real estate agents had purchased large parcels of land anticipating prices to rise even further, so that they could re-sell it at a premium or embark on prestigious residential projects. However, with buyers adopting a ‘wait-and-watch’ approach, such developers/builders/real estate agents were left in the lurch. Land prices which had consistently increased in the Krishna-Guntur region since the past four decades had reached a crescendo following the capital decision. With buyers mixing caution with prudence, there were no takers for land that was quoted at such high prices. This gradually resulted in a slump in prices from the artificially induced boom, thereby leading to stabilization in prices to that which was prevalent prior to the capital decision.
Developers blame State govt
Builders and developers are of the opinion that the government of Andhra Pradesh is to blame for the slump in land prices in the Krishna-Guntur region, touted to be the hotbed for major development activity. They feel that the government failed to initiate the development of any major infrastructure development projects in the region. Lack of sufficient financial aid from the Central government played havoc with the State government’s development agenda. Besides, it failed to get going with development projects like the Machilipatnam port, the airport expansion and the launch of premier institutions like AIIMS and NID.
Realty boom in the region
The fall in land prices in areas like Nuzvidu and Agiripalli were quite expected, considering that they are located at a fair distance away from the proposed capital region. However, what baffles developers is the slump in prices in areas like Guntur, Tenali, Nandigama and Sattenapalle which are closer to the proposed capital region. Infact, prices in many areas of Krishna and Guntur districts were quoted as high as Rs 2 crore per acre around mid 2014. Land prices in Nuzvidu were quoted a notch higher at Rs 3 crore an acre based on speculations that the new capital would be developed in the vicinity of the area.
Present scenario
Cut down to the present scenario, land owners in Nuzvidu are failing to get seekers even though land is offered at a measly Rs 40 lakh an acre. Other places like Tenali, Nandigama, Kanchikacherla, Tulluru and Sattenapalle have failed to fetch prices upwards of Rs 50 lakh per acre. In such a scenario, developers are wary of investing in any major residential projects in the region. Small investors are also treading cautiously. In a bid to attract buyers many real estate firms have resorted to offering freebies, like free gold or silver coins as well as free registration of property. However, realty experts are of the opinion that the slump in land prices in the region cannot be stopped unless the government initiates work on the proposed major infrastructure development projects.
