No rush to buy properties near Vijayawada

VIJAYAWADA: The announcement on the division of the state seems to have not made any impact on the property market in and around the Vijayawada and Guntur cities as of now.

Though the Union government is believed to be considering the pros and cons of locating the new state's capital between Vijayawada and Guntur, there is no mad rush for purchasing plots or apartments due to two reasons.

First, many people have already purchased house-sites and flats in the last couple of years; second, people are not completely convinced that the state will be bifurcated.

There is, however, a slump for more than six months in the property market due to various reasons including the volatile situation in the American economy. Non-resident Indians, main investors in real estate here, have tightened their belts and stopped investing in the property market.

But even after the recent clear announcement on the state's bifurcation, there is no much impact on the prices of the land, said P Trinath, a realtor at Vijayawada.

Srinivas of Creative Real, who is developing a venture at Agiripally village, 23 km from Vijayawada city, said that they had not increased the prices of the land even after the announcement on bifurcation.

'We are selling land at Rs 4,500 per square yard, the rate that was fixed six months ago.' He, however, said that many people here did not believe that bifurcation would really take place.

The prices of lands abutting the arterial MG Road (Bandar Road) in the city have already touched Rs 1 lakh per square yard, which is higher than the rates even in some metros.

'We had offered to sell a piece of our land at Rs 80,000 per square yard in the Governorpet area of the city. Till the announcement of the bifurcation on July 30, there had been a few enquiries, but surprisingly there have been no callers after that,' said P Goutham Babu, said a consultant who attributed it to the prevailing confusion among property buyers over state's division.

In the case of lands abutting the second major road in the city, Karl Marx Road (Eluru Road), the prices are hovering around Rs 60,000 to Rs 80,000 per square yard.

According the real estate sources, land has become scarce and not much is available for sale on either side of the highway between Vijayawada and Guntur where the rate is said to be Rs 10,000 per square yard.

Since there is virtually no land available for real estate development in the city and nearby areas, there will be vertical rather than horizontal growth, according to Rajling Gadde, president of the Greater Vijayawada Builders Association.

V Sirisha, general manager of Yugandhar Housing Pvt Ltd, expected an increase in land rates only after three months of the formation of the new state since the prices have already reached sky-high in the last couple of years.

However, RV Swamy, vice-president of CREDAI's Vijayawada chapter, said that the prices of flats (residential) had gone up after the announcement by Rs 300 to Rs 400 per square foot (sft) in the city.

It is estimated at least 5,000 houses will be needed by the end of this academic year as hundreds of families from Hyderabad and Rangareddy districts are expected to migrate to Vijayawada and its suburbs. Likewise, thousands of residential and commercial buildings will be required.

Rajling said the demand for commercial space would go up 10 times. At present, about one lakh sft space is available in the city.