Realty Surprisingly Static in Krishna, Guntur Districts
Dec 16, 2013
Source : The New Indian Express

 

GUNTUR: Even as the T-bill reached the state capital and Assembly and a hot debate was raging across the state about the creation of a new Telangana as the Union government has firmly determined to divide the state to keep its promise, the realty business has not been picking up in the Krishna and Guntur districts.

Predictions are very high that the Krishna and Guntur regions will be made the new capital as this area is ideal due to its geographical location, availability of drinking water resources and proximity to the sea.

However, there is no buzz among realtors and the public that this region will become the new capital of residual Andhra Pradesh.

Land transactions have been stagnant in Coastal districts for nearly four years. The same trend continues in these two districts as there are no buyers of land. The reason being the high cost of lands as the realty boom sky-rocketed during the Congress rule from 2005 to 2009 the land prices reached the highest level.

Ch Srinivasa Rao, a real estate agent in Mangalagiri, said this temple town is a great significance in Coastal districts because it a connecting centre between the two cities of Vijayawada and Guntur. The land prices in Mangalagiri reached the highest level about 10 years ago.

The state government collected applications for construction of houses under the Rajiv Swagruha schemes for middle class families and dropped the proposal due to high  land costs.

Slow economic growth, falling income of farmers, decline of income from the NRIs living in various European, Asian countries and the US, sluggishness in the software sector and other factors contributed to the downfall of realty business in the Krishna and Guntur districts.

D Sivaram, a realtor in Gollapudi, pointed out there is no hope that the realty business can pick up even after the bifurcation of the state because there are no buyers of land due to the high costs.

Everybody wants to own a land at least for the construction of a small house. But, with the prices so high, only the rich can afford buying housing plots in and around the city.

On the other hand, the government is also losing revenue due to decline of realty business. The government set the revenue target of `221 crore for the registration department of Western Krishna.

The western Krishna region has seven sub-registrar offices at Patamatam, Gandhi Nagar, Nunna, Ibrahimpatnam, Nandigama, Kanchikacharla and Jaggaiahpet.

The registration department received only `130 crore till the end of November 2013. With only three months left for the end of this financial year, there are less prospects of receiving a revenue of another `90 crore in three months.

District registrar (West Krishna) G Balakrishna said the revenue of the registration department will purely depend on the transactions of the realty business. The Western Krishna region got a revenue of only `170 crore as against the target of `203 crore for the financial year 2012-13. One more problem for the sluggishness in realty business is that the obtaining of loans is a difficult process.

Nationalised banks sanction loans to purchase house sites on the government value of the site. But, the government value is very low compared to the open market values of lands. Banks sanction loans to only UDA approved plots.

However, the UDA approved plots are located 10 to 15 kms away from Vijayawada and Guntur cities. K Tirupati Reddy, a middle class employee of a private firm, has questioned the use purchasing a plot in the gated community housing colonies where houses are not constructed and where no facilities are available.

He said that the banks need to relax the rules in sanction of loans for the purchase of house sites or construction of houses.

People of Seemandhra districts not in a hurry to buy lands by investing huge amounts of money with a hope of migrating from Telangana districts after the bifurcation of the state.

Gadde Rajling, honorary president of Greater Vijayawada Builders’ Association, said that both buyers and sellers are not in hurry to enter into land  transactions in the Krishna and Guntur districts. He said that no clarity emerged on the status of Hyderabad and it will take some more weeks to reach a consensus on the division of the state.

More than 100 ventures were developed around Vijayawada and Guntur cities during the last few years with a hope of brisk business. Due to various factors there was no rapid progress on the sale of these plots.

The real estate business is likely to boom if either Guntur or Vijayawada is made the new capital of the residual Andhra Pradesh comprising the districts of Coastal Andhra and Rayalaseema districts.

 

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