Decentralised Capital: Real estate investors in a fix in Vijayawada

Many real estate firms had purchased lands in and around Amaravati after it was declared to be the capital by TDP government.
For representational purposes ( File Photo | EPS)
For representational purposes ( File Photo | EPS)

VIJAYAWADA:   At a time when the real estate sector in the capital region is suffering losses from a series of unexpected developments-change of the guard to halting the construction activities-the sector was hit by yet another storm with Chief Minister YS Jagan Mohan Reddy hinting at the Assembly on Tuesday that the State could have three capitals.

Many real estate firms had purchased lands in and around Amaravati after it was declared to be the capital by TDP government. Also, several software professionals, doctors, engineers and middle-class people from various cities took loans, invested in lands and purchased flats in the region. However, with the Chief Minister making a strong pitch on decentralised development now, all those, who invested in real estate are looking at an uncertain future.

“Although the Chief Minister did not officially announce three capitals, his words in the Assembly can be understood as he has no regard for Amaravati. He stopped construction works there soon after he took charge, so his statement on Tuesday was not surprising.

The concept of Amaravati is dead,” said Confederation of Real Estate Developers Association of India (CREDAI) Vijayawada Chapter president Ch Sudhakar. Soon after the previous TDP government had announced that the capital will be set up in the Guntur region on the banks of Krishna in 2015, investors and employees made a beeline to utilise the opportunity and buy plots or houses at throwaway prices.

Before the State elections, the realtors sold lands for prices as high as Rs 25,000 to Rs 30,000 per square yard in the capital region. Now, the price has depreciated to Rs 15,000 per square yard, yet finding buyers has been a difficult task. “Despite land prices in Thullur and other mandals around Mangalagiri skyrocketed, I invested around Rs 40 crore, believing that the capital charisma will help me in getting profits. Not just me, everyone, who invested in and around the Amaravati region are suffering now as there is doubt regarding its capital status and land prices are depreciating day-by-day,” said a realtor Krishna Murthy (name changed).

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