With Chandrababu Naidu coming back to power in Andhra Pradesh and his party pledging to make Amaravati the new capital, the local property market, which was on a shaky ground till a week ago, has come back into the spotlight.While land prices have doubled since the exit polls predicted Naidu’s win, existing projects have increased prices by 10-20%, according to top real estate developers and brokers. “I feel prices will go up at least 50% in the next one year,” said Gaddipati Hari Babu, chairman of Lahari Infrastructure, a Hyderabad-based developer and president at developers’ industry body Naredco National.
Babu said land prices had shot up to Rs 40,000 a square yard when Naidu, in his previous avatar as the chief minister, had zeroed in on Amaravati. But they crashed to Rs 13,000-14,000 a square yard after Jagan Mohan Reddy came to power and abandoned the idea.“We are not even at the half way mark from the fall,” Babu said. Other developers agree. “I feel prices in Amaravati will rise by 20- 50% in the short term and 100% eventually,” Gummi Ram Reddy, secretary at industry body Confederation of Real Estate Developers Association of India (Credai), said.Mudit Gupta, city lead – Hyderabad and director at Anarock Property Consultants, said property investors will now shift focus to Amaravati instead of Hyderabad. Prices are expected to rise by another 10 to 15% once the government makes a formal announcement on the new capital, Gupta said.
“Naidu not only wants to make Amaravati the new capital of Andhra Pradesh with modern infrastructure and developments; he also wants to make it a new IT hub,” Gupta said. He said in one project in Amaravati, they have increased prices from `5,500 per square foot to `5,800 after the Assembly election results.Amaravati has a chequered history. Naidu wanted to develop it as a greenfield capital at a cost of over `50,000 crore, but the state’s poor finances threw challenges .When Reddy took over in 2019, all work in Amaravati halted, turning it into a ghost town. Projects got stalled, leaving investors in the lurch. Property prices halved overnight, said developers.
Reddy promoted Visakhapatnam as an investment destination and declared it the executive capital, with Amaravati as the legislative capital and Kurnool as the judicial capital. This three-capitals idea faced criticism despite Reddy’s claims of decentralisation. Andhra losing Hyderabad to Telangana also dealt a big blow, experts said.Now with Naidu coming back, things would change for the better, developers said.
“Since Naidu is an important part of NDA, his support is very much needed… he can bring in lot of investments from the Centre to Amaravati like what happened to the GIFT city,” said Lahari Infrastructure’s Babu. He said they will invest in Amaravati on a big scale and launch many new developments once formal announcements are made.Joseph Thilak, national director – occupier strategy and solutions at Knight Frank (Hyderabad and Chennai) said they are getting inquires for investments in Amaravati. “Investor interest is always linked to election results . This interest will lead to increase in prices for greenfield projects,” Thilak said.