Investments of prospective buyers and realtors close to Rs. 10,000 crore is said to have been locked up in the Capital region over speculations that land values would go up phenomenally. With no progress in the plans announced by the people’s representatives and the government, the realtors are apparently anxious about their investments.
Fearing blockage of investments, land owners are on the look out for buyers. But, absolutely, a seller market is prevailing with no takers now. The real estate bubble may burst any moment, say the industry experts.
Uncertainty over the location of the new capital that prevailed a few months ago had fuelled speculation in the real estate sector. The property values have risen mainly due to speculation.
Today, the people and realtors hold hundreds of acres in Nuzvid, Mylavaram and Thullur etc areas. Crores of rupees changed hands though there were no formal agreements or registrations. Farmers and real estate dealers had a heyday then as buyers bought lands or entered into oral agreement to buy land at whopping prices.
According to information, the people, who entered into formal agreements are now keeping their fingers crossed as there is no way out except for holding the land or selling it at a price quoted by the buyer.
Capital Region Builders Association (CRBA) chairman Gadde Rajling says, “We see a majority of real estate development happening without much attention being paid to sustainability. Unconfirmed reports say people have invested Rs. 5,000 crore to Rs. 7,000 crore in areas such as Gannavaram. And, another Rs.3,500 crore is said to be invested on the Thullur side.”
Land prices were pegged around Rs. 15 lakh an acre in Thullur and surroundings before it was declared as Capital city. The prices went through the roof and people invested Rs. 1.5 crore to Rs. 1.75 crore an acre. An acre of land abutting the NH-5 which was valued at Rs. 2 crore to Rs. 5 crore was quoted at Rs.15 crore to Rs.20 crore.
Heavy speculation remains a concern as it means that valuation, especially in upcoming locations, is not backed by real demand. “Speculators can remain invested only for a specific period. They have to eventually sell to end users. Unfortunately, there are no buyers. The people are adopting wait and watch policy,” says Mr. Rajling.
(Reporting by
G.V.R. Subba Rao)
