Property prices in Vijayawada have spiked nearly 20 per cent in one month as realtors have shifted their focus to the coastal city, anticipating that it would become the capital of Andhra Pradesh if a separate Telangana is carved out of the state.
Although both Telangana and Samaikyandhra agitators are still fighting over the status of Hyderabad, many builders are showing a keen interest on 'construction activity' in Vijayawada, said Giridhara Prasad Gupta, a real estate businessman.
And this has led the prices of apartments and plots zooming northward in Vijayawada. Ramavarapadu and Gannavaram in the city are now the most sought after areas as the L&T IT Park construction is going on there.
C Sekhar Reddy, president, Andhra Pradesh Builders Forum, said real estate transactions in Hyderabad have come down recently.
However, he said, this could not be attributed totally to the Telangana issue. "There has been a slump in the sector for the past one year," Reddy told PTI.
He said on an average as many as 15,000 apartments were sold in Hyderabad from 2004 to 2007.
The figure has come down to 10,000 in 2008. According to a senior official, the property registration activity has come down by 10 per cent in Hyderabad whereas it is normal in other parts of the state.
Reddy said the builders were hopeful of recovering from the signs of global recession and see good growth this year.
"Hyderabad has become global destination for investments. Telangana will not be an issue for investments. This is only a temporary issue," the builders frum president said. "There were massive speculative investments in and around Vijayawada when the Congress party won election in 2004 along with Telangana Rashtra Samithi. People have invested thinking that Telangana will be separated.
However, it did not meterialise as they expected.
"Now only those big people are creating hype in Vijayawada now to clear their investments," a contractor said on condition of anonymity.