Vijayawada: The real estate in the AP capital region Amaravati, which was in bloom right till the beginning of the Assembly elections a few months ago, is now in a state of gloom; with an upscale apartment project having been put on distress sale by its promoters. This is being perceived as the start of a trend rather than an exception.
Even as the construction cycle and most works in Amaravati have come to a grinding halt, the new YSRC government of Chief Minister Y.S. Jagan Mohan Reddy has been refusing to divulge its plans on the capital region, which had turned a nightmare for apartment builders and realtors.
Land rates have dropped alarmingly in the last few weeks. An acre of land that fetched a price of Rs 2 crore three months ago has now depreciated to less than a fourth, and is being quoted at Rs 45 lakh.
The apartment project that was put on distress sale for a takeover is about 40 per cent complete in an area of 1.25 acre, with 116 flats planned when completed as part of a gated community project. It is confirmed that there a few more apartment ventures that are up for distress sale or project takeover.
“There is no clarity on the new government’s vision on Amaravati. If the government wants Amaravati to be only a functional city, with some administrative buildings, the real estate market will further crash and many realtors might start committing suicide given the kind of investments they have put in all these years,” said a Confederat-ion of Real Estate Devel-opers Association of India (CREDAI) member, who wished not to be named.
Rs 10,000 crore worth projects hit
The realty business developed largely around the proposed capital of Amaravati as people and investors from all over the state, other states and even NRIs purchased lands, plots and flats in the past five years. The reality business further increased last year due to a speeding-up of various government constructions in and around Amaravati.
The public is showing reluctance to purchase properties for the past two months, since the election results witnessed a change in government, leading to an uncertainty of the future of the Amaravati plan, forcing the realty sector into a continual slump.
As per sources in the real estate market, nearly Rs 10,000 crore worth projects are facing a slump due to the absence of any sale or purchase interest and activity. A realtor said that there was an inventory of nearly 20,000 flats ready to be sold and another 10,000 flats under construction in the capital region, and around Guntur and Krishna districts but with no takers now.
