K.N. Murali Sankar
The highest price is being quoted for the open plots `This trend affects the market badly in the long run'
VIJAYAWADA: By-election to Karimnagar Parliament seat has created an artificial rise in real estate prices in the city. Soon after the announcement of an election there, real estate businessmen in the city began a campaign about the increase in the land prices. Some builders have enhanced the prices of apartments under construction.
Real estate agents increased the land prices by a whopping 20 per cent to 30 per cent in some localities in the city and a few on the outskirts three months ago, following the resignation of K. Chandrasekhar Rao, president of Telangana Rashtra Samithi, to the Parliament seat. Even before pollsters came up with predictions on the result of the by-election, real estate agents in the city are trying to cash in on the situation saying that `Telangana sentiment' is prevalent strongly among the voters of Karimnagar.
According to real estate businessmen, owners of vacant sites facing Mahatma Gandhi Road in the city are quoting an exorbitant price per square yard. The highest price is being quoted for the open plots on the M.G.Road between Raghavaiah Park and Benz Circle, followed by road-facing properties between Benz Circle and Autonagar. The price being quoted for plots between Autonagar and Kanur is lesser than those on the earlier stretch. Prices in the congested Satyanarayanapuram area and the recently-developed areas in and around Currency Nagar have also been hiked.
"People from this region are thinking twice before investing in real estate in Hyderabad. They prefer to invest in Vijayawada and Visakhapatnam. The price hike is due to the sudden demand for the land," observes Gadde Rajaling (Raja) of `Developers', a construction firm. He, however, says the end result of the by-election will not bring down the land prices here. "For, there is no instance when the land prices have dropped in Vijayawada so far. So, their investment is safe," he says.
Echoing similar opinion, general secretary of Vijayawada Builders Association Velagapudi Ramarkrishna says the "by-election boom" will continue for one more month. "If Mr. Rao wins the election, there will be further hike in land prices here. Otherwise, the present prices will continue for some more time," he says.
"It is an unhealthy trend, which creates a gap between construction industry and purchasers from the middleclass. Since middleclass is the target group for apartment complexes, this trend affects the market badly in the long run," says V. Ranga Prasad of Kakatiya Builders.
Though the transactions are based on market value, registration of the land is based on the price fixed by the government. The highest price on record is, however, Rs 17,500 per square yard.