Real estate prices surge in Vijayawada-Guntur belt

Speculation by rich leaves middle and lower income in lurch

This apart middle class and lower middle class groups find their aspirations to own independent housing plots hanging in balance, thanks to the unscrupulous practices of certain real estate companies operating under the jurisdiction of Vijayawada-Guntur-Mangalargiri-Tenali Urban Development Authority.

NRIs, who turned to investments in real estate due to decreasing bank interest rates and lower returns on financial and industrial investments, pumped upto Rs 125 crore every month till a year ago into the market in Guntur and Vijayawada.

After a lull NRIs have again started sending amounts, close to Rs 40 crore a month, which have gone into the buying of farm lands. They bought over 600 acres around Vijayawada alone. Besides NRI money, the local investments by rich financiers and owners of transport companies have led to spurt in land valuations by as much as 27 per cent over the year.

At present, in prime areas in and around Guntur and Vijayawada, a 200-yard plot costs over Rs 12 lakh. Along the Vijayawada-Mangalagiri-Guntur highway, plots are available at rates of Rs 50,000 to Rs 1.50 lakh. The exorbitant rates have ensured that the middle and lower income groups are shying away from any housing activity.

Money running into crores is apparently locked in the plots, which have not yet been handed over. Even in the case of registered plots buyers are not able to undertake any construction activity as the layouts lack facilities such as roads, water, and electricity.

The plots are registered without approval by the authority concerned. In many cases buyers even today do not know which actually is their plot as 10 years have passed since they paid full amounts.

In view of this murky picture, genuine real estate companies are are also facing flak. A number of companies, which collected huge amounts a few years ago, have vanished.

Without proper numbering, without proper layouts, with no registration and with no one to turn to, scores of poor buyers are now hoping to sell off their plot to some gullible buyer. In certain instances the same plot is registered in the name of six or seven customers.

The government in a belated move to check unscrupulous companies had made it mandatory that the companies themselves register the plots and the buyer be present at the time of registration.