Capital difference

With no clarity over its capital status, Amaravati’s real estate market slumps. Hyderabad, meanwhile, shows steady growth

- Rahul Devulapalli

Gannavaram is the gateway to Amaravati, the capital of Andhra Pradesh. Over the last few years, the Vijayawada International Airport at Gannavaram got busier after former chief minister N. Chandrababu Naidu announced his choice for the capital. More than the airport, it was the new capital, located some 30km away, that changed the lives of the people in the town and in the neighbouring villages.

After the state was bifurcated in 2014, businessman Kotagiri Prasad, from Gannavaram, was witness to an unprecedented flow of cars into the area in 2015. “There were newspaper reports that the new capital would cover Gannavaram. Overnight, land rates increased from ₹30 lakh per acre to ₹4 crore,” he said. “The speculation led to a large number of NRIs and investors from across the state and country hunting for land. It looked like every resident had turned into a realtor.”

But then came the announcement that the capital would come up in a different location, and the land prices dropped to less than ₹2 crore per acre, said Prasad. “Many of the buyers who had advanced money for registration absconded,” he said. “Many lost money. Real estate boards vanished and big cars stopped coming.”

For the third time in five years, the prices in Prasad’s area have fluctuated again—the slump, this time, is owing to rumours around the status of Amaravati after Y.S. Jagan Mohan Reddy’s YSR Congress Party came to power with an overwhelming majority this year.