Amaravati Real Estate: Why It's Waning and What's Behind It

As uncertainty looms over Amaravati's growth trajectory, investors, particularly Non-Resident Indians (NRIs), appear sceptical about investing in the capital city of Andhra Pradesh.

In addition to the lack of high-paying jobs and major businesses in the region, IT Minister Nara Lokesh's focus on transforming Visakhapatnam into a hub for the Information Technology (IT) sector has further diminished Amaravati's appeal.

It is believed that it will take at least 8-10 years for Amaravati to experience a significant influx of lucrative employment opportunities.

Although nine months have passed since the Chandrababu Naidu-led NDA government took office in the State, work on building Amaravati has yet to commence.

Despite promises to support the development of the capital city, the Central government has arranged for multilateral loans. While institutions such as the World Bank, Asian Development Bank, and HUDCO (Housing & Urban Development Corporation) have approved the loans, the funds have not yet been released.

Moreover, the inflated land prices in Amaravati have become a deterrent for investors.

Current real estate prices in Amaravati range from ₹35,000 to ₹60,000 per square yard, which many investors feel is steep, considering the region is still underdeveloped.

Chief Minister N Chandrababu Naidu's efforts to attract investments by reportedly offering free land to businesses such as the Daspalla Group are not expected to yield significant results. It is believed that when business owners choose a location and invest in it, it instils confidence in other investors as well.

Additionally, the floods that ravaged Vijayawada in September 2024 have further prompted investors to take a more cautious approach.