With Chandrababu Naidu returning to power in Andhra Pradesh and his party pledging to reinstate Amaravati as the state capital, the local real estate market is experiencing a significant resurgence. The once dormant property market has become a hotbed of activity, with land prices skyrocketing.
Land Prices Soar After Election
Following the election forecasts, land prices in Amaravati have doubled. Top real estate developers and brokers report a 10-20% increase in prices for existing projects. Gaddipati Hari Babu, chairman of Lahari Infrastructure and president of the National Real Estate Development Council, predicts land prices will rise another 50% over the next year.
During Naidu’s previous tenure as chief minister, land prices reached Rs 40,000 per square yard but fell to Rs 13,000-14,000 per square yard under Jagan Mohan Reddy’s administration. With Naidu back, experts believe prices are poised for a significant rebound.
Developer and Investor Optimism
Developers are optimistic about the future. Gummi Ram Reddy, secretary of the Confederation of Real Estate Developers’ Associations of India, forecasts a 20-50% increase in land prices in the short term, potentially doubling in the long term. Mudit Gupta, city lead for Hyderabad and director at Anarock Property Consultants, expects property investors to shift their focus from Hyderabad to Amaravati, anticipating another 10-15% rise in prices following formal announcements about the new capital.
Strategic Development Plans for Amaravati
Naidu’s vision for Amaravati extends beyond its role as the state capital. He aims to transform it into a modern IT hub with advanced infrastructure, attracting both national and international investments and spurring economic growth.
Historical Context and Future Prospects
Amaravati’s journey has been turbulent. Initially planned as a greenfield capital with a projected cost exceeding Rs 50,000 crore, the project faced setbacks due to financial constraints. Development halted under Jagan Mohan Reddy’s administration, turning Amaravati into a ghost town with stalled projects and falling property prices.
Reddy promoted Visakhapatnam as an investment destination, declaring it the executive capital, with Amaravati as the legislative capital and Kurnool as the judicial capital. This tri-capital plan aimed at decentralization faced criticism and failed to revive Amaravati’s fortunes.
Investment and Development Ahead
Naidu’s return promises renewed focus on Amaravati, similar to the development of Gujarat’s GIFT city. Lahari Infrastructure’s Babu expects significant investments and numerous new development projects after official government announcements. Joseph Thilak, national director for occupier strategy and solutions at Knight Frank (Hyderabad and Chennai), reports increased investment inquiries linked to the election results.
Strategic Recommendations for Investors
Investors eyeing Amaravati should consider:
- Monitoring Government Announcements: Stay informed about official government plans for Amaravati’s development.
- Diversifying Investments: Consider both residential and commercial properties to leverage anticipated price increases.
- Adopting a Long-term Perspective: Maximize returns by holding investments as the city’s infrastructure and economy evolve.
Conclusion
Amaravati is poised for significant transformation with Naidu’s return to power and his ambitious plans for the city’s future. As land prices rise and investor interest grows, Amaravati is set to become a prime real estate destination in Andhra Pradesh. Investors and developers have a unique opportunity to participate in the city’s growth, paving the way for a prosperous future.