Nellore real estate biz badly hit as investors look to Amaravati

Nellore: Though several new projects were announced, they are yet to spur the realty trade in Nellore district. Majority investors are looking at Amaravati region hopefully to make rich profits and there has been no significant trade in the district.
Still, thanks to the development and the Centre’s announcement of making Nellore a smart city, house rents are soaring imposing a burden on the middle class and lower middle class people.
In fact, during 2005, new special economic zones at Tada, Naidupet and commencement of Krishnapatnam Port activities have pushed the trade and consequently prices of lands in city and revenue divisions shot up abnormally.
At that time, one ankanam of land in the city areas (72 sq. feet or 8 square yards) was Rs 5,000-10,000 and suddenly it went up to Rs 1 lakh to 3 lakh within two to three years.
Middle class was the victimised group which cannot afford to buy a house site in the city limits. But, realty ventures even at a distance of 10 to 15 km attracted them. Each plot was sold at Rs 1 lakh to 1.50 lakh.
Soon, the trade reached a peak when people had to spend a minimum of Rs 50 lakh to Rs 1 crore for a house site in city and continued till the State bifurcation. But, purchasing power of consumers dwindled with this irrational growth. People are not ready to buy an ankanam even at Rs 1 lakh to 1.50 lakh as they have additionally to spend Rs 15 lakh to
20 lakh for constructing a simple house.
A simple site with 15-20 ankanams requires Rs 20 lakh to 30 lakh apart from construction cost of the house.
Now, cost of ankanam came down to Rs 1 lakh in normal areas and Rs 1.5 lakh to Rs 2 lakh in gated colonies like Magunta Layout and spinning mill layouts. Though sellers quote huge amounts there has been no response from the buyers, brokers say. “Realtors now shifted to Amaravati and close to the areas of the capital region for getting fast bucks. They are not concentrating in city since they won’t get huge profits. They are investing huge amounts on lands in Guntur and Vijayawada areas since they are the future assets,” said V Seshagiri Rao, a realty broker.
But, due to influx of various companies, thermal plants, and port based industries, house rents in the city increased abnormally. Now, the rent of a single bedroom house varies between Rs 5,000-6,000 and double to triple bedroom between Rs 8,000 and Rs 12,000.
The rent of newly constructed triple bedroom houses varies from Rs 12,000 to Rs 14,000.

P V Prasad