Land transactions got almost halted in Krishna and Guntur districts for the last few months as the farmers and realtors are not willing to sell their lands with hope of getting higher prices after bifurcation of the state.
The land prices are already very high in these two districts and are expected to rise further after bifurcation of the state. Yet, the process for bifurcation of state and proposals for construction of a new capital for Seemandhra state has no great impact in Krishna and Guntur districts.
People are still confused about the division of the state and the Vijayawada-Guntur region becoming the new capital. The land prices are already very high in these two districts and realtors are not able to purchase lands at exorbitant prices.
Another important reason for the stalemate in land transactions is that the Union government has not announced that Vijyayawada-Guntur region will become the capital of the residuary state of Andhra Pradesh. Moreover, the leaders of Krishna and Guntur districts have not started lobbying for the new capital as is being done by leaders of some other districts in Seemandhra. These leaders have already voiced their demand for making Kurnool, Vizag, Ongole and Tirupati the new capital of the truncated state.
In Krishna district, an acre of land abutting highways and main roads costs anywhere between Rs 1 crore and Rs 3 crore. The situation is similar in Guntur district. So far, thousands of acres of land in Gannavaram, Gollapudi, Kanuru, Nunna, Enikepadu and Ramavappadu areas surrounding Vijayawada have been converted into real estate ventures.
Realtors are unable to sell the plots for more than four years due to the economic slump and other reasons. Neither the Vijayawada Municipal Corporation nor the Vijayawada, Guntur, tenali and Mangalagiri Urban Development Authority (VGTMUDA) received a single application in 2012 for construction of a new apartment. This is because the land prices are very high and construction costs too are increasing every year. Keeping in view these reasons, realtors are not investing huge amounts of money either for construction or creation of new ventures.
S Chakrapani, city planner, said the applications received by the VMC is for construction of new apartments and multi storied buildings are declining due to high cost of land and less demand
for apartments. Another important reason for the downfall of realty business is the declining remittances from NRIs in the two districts situated on either side of Krishna river.
Due to meltdown and global recession, the income levels of Telugu-speaking people in the US, UK, Ireland and other countries have gone down. Consequently, the NRIs from Krishna district settled in these countries are not able to send money back to their homes. The slump in the software sector too has contributed the sluggishness in realty business in Krishna and Guntur districts. Software engineers were the major buyers of new flats after businessmen and government employees in this region. Gadde Rajling, president of the Greater Vijayawada Builders Association, said land prices were already very high in Krishna and Guntur districts and would increase further with bifurcation of the state.
Realtors have already purchased vast tracts of lands around Vijayawada predicting that the city would become Greater Vijayawada. Same is the case with Guntur city which will be expanded to become Greater Guntur with the merger of ten villages with the city.
It is estimated that 2,000 acres of government land is available between Krishna and Guntur districts for building a new capital.
Dhanekula Sivam of Dharani Real estate at Gollapudi, one of the biggest real estate consultants in the city, said land transactions stagnated for the last few years as farmers and others have stopped selling their lands hoping to get higher prices in the event of the state getting divided.
District registrar (western Krishna) G Balakrishna said both government and market value of land is very high and there is less possibility of the prices rising further.
Md Ameer Jani, a realtor at Mangalagiri, said Mangalagiri town, which stands midway between Guntur and Vijayawada, can be developed into a new model township if the drinking water problem is solved. He said several hundreds of acres land is still available in some areas at reasonable rates. He said the government has to give incentives and concessions to the middle-class people to develop new colonies on the outskirts of the town.
Jani said the land prices in the town had already skyrocketed due to the realty boom witnessed six years ago. But now, with the uncertainty over the state’s division, transactions have declined over the years.