The fall in prices, sales and slowdown of demand seems to be heading for the burst of real estate bubble in the successor state of Andhra Pradesh. Especially in the proximity of the state's new capital Amaravati, the situation is more worse in the surrounding villages. The land business in places like Kanchikacherla, Paritala is lull lately.
Two years ago, after the bifurcation of the united state, the prices have shot up drastically and reached its pinnacle. The land, which used to cost Rs 10 Lakh per acre before division, has touched Rs 1 Crore to Rs 1.5 Crore per acre after the state bifurcation. Lands aside Hyderabad-Vijayawada 65 No. National Highway have even pegged at Rs 2 Crore per acre.
But the situation today is quite opposite. With no takers and investors backing out, there is a steep decrease in the prices. Several property firms which shown interest initially opted out and the land value is now cut to less than Rs 50 Lakh per acre. While few land owners, farmers are still hopeful of the real 'boom' once again, farmers who're in dire need of money and are caught in catch-22 situation whether to sell the lands at the present price or to wait.
Also the CRDA approvals for layouts within 500 mts distance of villages is turning out to be major spoilsport. With government not giving CRDA approvals for the layouts above 500 mts distance from villages, several layouts and small-time real estate businesses are seeing dull phase. Apparently, people are not showing much interest in the layouts in and around the area at the moment. With this, real estate dealers have stopped laying new layouts. It's expected that the situation might improve once the outer ring road works for the new capital and Guntur Vaikuntapuram-Damulur reservoir works would begin.