VISAKHAPATNAM: All the buzz about transforming Vizag into a `smart city' coupled with chief minister N Chandrababu Naidu's promise of developing it into Andhra Pradesh's IT, industrial, tourism and financial hub post bifurcation seems to have sent rates of land in and around the Port City spiralling northwards.
According to realtors, land parcels in prime locations along the road to Bheemili from NH-16, Gambheeram as well as Anandapuram-Bhogapuram, where the greenfield airport is slated to come up, are quoting the highest prices.
Bitten by the 'smart city' bug, rates have galloped to nearly Rs 2-3 crore per acre from Rs 70-90 lakh per acre just three to four months ago in these areas. The expectation is that the city will expand towards these areas on the back of the IT and tourism sectors.
Realtors attribute the over 100% rise in prices of land initially to the bifurcation of the state and eventually to grandiose announcements of making the Port City a `smart city' apart from a hub of various sectors. Confederation of Real Estate Developers' Association of India (Credai) Vizag chapter chairman B Raja Srinivas said, "Soon after bifurcation, investments initially flowed into Vijayawada and the neighbouring areas as it was touted as the new capital. But prices there have reached a saturation level and now the focus is turning to Vizag because of recent developments - especially the `smart city' announcement."
Concurring, Swathi Promoters managing director Ramesh Reddy said, "Three to four months ago, land was available for Rs 50 lakh per acre in the Anandapuram-Bhogapuram belt, but now the owners are demanding Rs 1 crore per acre."
However, he pointed out that prices of plots in these areas were not increasing as exorbitantly as bulk land prices. "The prices of %plots have increased by around 20% in the last 3-4 months in these areas, but are nowhere near the boom being witnessed in bulk %land rates."
Another realtor, seeking anonymity, said, "While some of the farmers are holding onto their land hoping to get even higher rates, some of them have already sold their property and a major chunk of the land in these areas is already in the hands of brokers, who are trying to create an artificial boom hoping to cash in on the development of Vizag. It won't be surprising if by now almost 70% of the prime land is in the hands of the brokers."
Even the farmers, who are in possession of land, are now acting pricey. In fact, a marketing executive of a real estate firm said that they have been trying to acquire land from farmers in areas like Bhogapuram, which is full of mango and coconut plantations, but having immense difficulty in doing so as farmers are quoting exorbitant rates on expectation that land prices will shoot up further.
Explaining the phenomenon of bulk land prices going up much faster than plots, developer K S Narayana said: "Bulk land prices always increase faster than those of plots. The prices of plots will increase once construction activity begins in these areas."
A case in point, he said, is that though bulk land rates have increased exponentially in the Anandapuram-Bhogapuram belt, the jump in prices of apartments and flats in Madhurawada, which is much closer to the city, is comparatively lesser as there is an excess supply at present.