Gold loans now feed Vijayawada realty frenzy

A view of Vijayawada city from Gandhi Hill showing the dwellings slowly occupying the hills after fully covering the plain area. Photo: V. Raju  

For 47-year-old employee Ramakrishna (name changed), buying land close to ad hoc capital in Vijayawada made more business sense than keeping the moolah in the form of gold in the locker. Thanks to the news on Vijayawada which is in the race for capital city of Andhra Pradesh, his systematic investment on land could see a 300 per cent appreciation in less than three months.

According to Ramakrishna, gold in the locker is a dead capital and hence he decided to pledge it to purchase land to take advantage of the rising realty market.

“I bought 100 yards land for Rs. 2,500 per square yard at the end of May near Thotapally, ten km from Medha IT Park. Later by the end of July when I witnessed appreciation, another 100 yards was purchased at Rs. 5,000 per sq/yd. Now the price is quoted at Rs. 12,500 a sq/yd and there is no land for sale,” said Ramakrishna.

About Rs. 7.5 lakh investment is likely to fetch him Rs 25,00,000 according to him.

Smart solutions

With Chief Minister N Chandrababu Naidu’s decision to locate the new capital in the centre of the state, land prices here have tripled in less than three months and loans against gold have merged as the smart investment solutions.

Commercial banks

The size and number of gold loans have substantially gone up according to two commercial banks based at Vijayawada and Guntur.

Meanwhile, the real estate firms are following a wait and watch approach ever since Vijayawada was announced as a temporary capital on Tuesday.

“We need to rediscover price point per yard. An acre, priced at Rs. 30 lakh three months ago, is costing over a crore near Thotapally, Telaprolu and Agiripalli regions,” said a representative of J.V.R. Real Estates. Temporary consolidation is expected by the end of August.

Meanwhile, the State administration is working to get the high profile Medha Information Technology Park near Gannavaram Airport ready to house several government departments as a temporary measure. The building was originally meant to house IT firms but a sizable part of it is vacant with poor response form companies.

Central location

The government has created enough buzz over the Vijayawada, Guntur, Tenali and Mangalagiri (VGTM) region which is a central location and is well connected through rail,road, air and water.

Besides, the Sivaramakrishnan Committee on capital is also scheduled to give its report on capital by the end of this month.

About seven districts in the State are in race for capital city.

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Printable version | Oct 26, 2020 10:37:57 AM |

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