by THO
The real estate activity in the Vijayawada-Guntur region has gained momentum with the works on Andhra Pradesh capital city of Amaravati picking up pace after the Chandrababu Naidu government resumed the abandoned constructions and called for tenders for massive infrastructure projects, people familiar with the development said.
The real estate developers, whose investments in various projects got locked up during the YSR Congress Party (YSRCP) rule headed by YS Jagan Mohan Reddy when he abandoned the Amaravati capital city project and mooted the three-capitals plan, are now hoping that there is going to be a considerable appreciation in the land values and demand for real estate projects.
“During the earlier regime of Chandrababu Naidu between 2014 and 2019, several realtors and builders invested big money on real estate ventures and constructions in Vijayawada and Guntur, hoping that there will be huge economic activity in and around Amaravati capital city. But when the Jagan government took a policy decision to abandon Amaravati project, they suffered a big setback,” YV Ramana Rao, builder and president of Confederation of Real Estate Developers of India (CREDAI), Andhra Pradesh chapter, said.
In the last five years, most of the investors from Andhra region diverted their investments to real estate projects in the Telangana capital city of Hyderabad, especially in the western areas like Narsingi, Kokapet and Gandipet, which has witnessed massive real estate boom.
“Some of them also showed interest in Visakhapatnam, which was projected as the executive capital of Andhra Pradesh by the Jagan government. It is also a cosmopolitan city like Hyderabad with a lot of potential for growth,” said another realtor C Sekhar Reddy, former national president of CREDAI. However, due to uncertainty in the three capitals plan due to legal litigations, the real estate activity witnessed a big slump both in Amaravati, Vijayawada, Guntur and even in Visakhapatnam, he said.
Now that the Amaravati capital city is back and construction activity began picking up pace, it has raised a lot of hope among the real estate developers. “But they are cautious now, unlike in the past when they put in big investments in land and construction of apartments. Once the capital city works pick up and infrastructure activity like outer ring road, by-pass roads, underground drainage works etc gains momentum, the real estate activity will also witness a boom,” Sekhar Reddy said.
According to Ramana Rao, there has already been a steady rise in the land value in Vijayawada-Guntur region, as people have started evincing interest in buying properties. “The cost of the plots in and around Amaravati capital region which fell down to less than ₹20,000 per square yard have already doubled in the last six months. The projects which were put on hold due to lack of buyers are now getting sold out,” he said.
For the Naidu government as well, the resumption of real estate activity has already started fetching good revenue. From February 1, it has enhanced land registration charges, though it has exempted the Amaravati region from the enhancement. “Even in Vijayawada and Guntur, it has not gone up abnormally – may be to the maximum extent of 20%. Yet, there is no impact on the realty sector,” Ramana Rao said.
He said the way the state government is speeding up the works in the capital city region by investing big money has given a lot of fillip to the real estate sector. “The government has finalised tenders for works worth ₹20,000 crore and will call for fresh tenders worth another ₹20,000- ₹30,000 crore in the next month. This is a good sign for us,” he said.
Another real estate developer, who did not wish to be quoted, there has been a lot of appreciation in the land value at Tadepalli, Undavalli and Mangalagiri areas – up to ₹40,000 to ₹60,000 per square yard. “In the next one year, it might touch ₹1 lakh per square yard,” he said.
In November 2024, state municipal administration and urban development minister P Narayana hinted that the state government is contemplating merging the four metropolitan areas – Vijayawada, Amaravati, Mangalagiri and Guntur into a “mega metropolis” in the next 10-20 years. “The jurisdiction of AP Capital Region Development Authority would be extended to these areas gradually,” he said.
Ramana Rao said a mega city appears to be the ultimate plan of the present government. “Already, a lot of constructions have come up along Vijayawada-Mangalagiri area and they are gradually expanding up to Guntur, which is just 20 km away. In the coming years, there is going to be a real boom in the Mangalagiri-Guntur belt as well,” he added.
