Amaravati seems to be losing its appeal, especially among Non-Resident Indians. The enthusiasm witnessed during the 2014-2019 period has significantly waned, raising concerns about the region's growth trajectory.
Firstly, the current real estate prices in Amaravati remain high, ranging from Rs 35,000 to Rs 60,000 per square yard. This pricing appears steep, particularly when the region lacks high-paying IT jobs and major business establishments.
Experts estimate that it will take at least 8-10 years to witness a significant influx of IT companies and lucrative employment opportunities, especially as Nara Lokesh is now focusing on developing Vizag as an IT hub.
Furthermore, the move by Chandrababu Naidu's government to offer free land to businesses, such as the Daspalla Group and certain educational institutions, raises concerns.
While this strategy aims to attract investments, skeptics argue that true development can only occur when businesses willingly purchase land, thereby driving demand and boosting property values. The current approach seems to lack the necessary market-driven momentum.
Interestingly, the Vijayawada region continues to defy expectations with its consistently high property prices, often surpassing those in Hyderabad, despite poor rental yields. This paradox further complicates the investment landscape in the capital region.
Rising popularity of YS Jagan Mohan Reddy is another fear that investors are not leaving. There is no guarantee that he won't come back as CM again. Many believe that anti-incumbency is common and so there wouldn't be a guarantee that TDP will rule for the next term as well.
Moreover, Amaravati is not a strategically located naturally growing city like Hyderabad, but it is an artificially growth-oriented city driven by politics. So investors fear that if Jagan comes back, their Amaravati investments will be in doldrums.
In light of these observations, investing in Amaravati's real estate market at current rates may not be a prudent decision, as per NRI and real estate circles.