City Buzz: Realty prices may go down in AP

It’s a big land bonanza for the residents of urban Andhra Pradesh. The State Assembly has decided to repeal the Urban Land Ceiling Act freeing 28,000 acres of land. That means real-estate prices are set to go down.

Nizam’s city is growing and growing fast. It’s the dream of every resident to own a house in the bustling metropolis. Yet, sky-high property prices means, for many, the dream remains unfulfilled. But there is finally some good news. The state government’s decision to scrap the Urban Land Ceiling Act is expected to bring down real estate prices.

“We expect prices to stabilise in the immediate future. But in the coming months, say six months from now, land prices will come down,” said George Johnson, Regional Director, Jones Lang La Salle Meghraj.

And it’s not just Hyderabad. A whopping 28,0000 acres of land will be freed up across cities in Andhra Pradesh. These lands, stuck in litigation for long, will now be up for grabs. And it’s not just the developers and the aam admi, the government also expects to reap the benefit.

“The whole world is moving towards liberalization. So, we have repealed this ULC Act to speed up economic growth. In fact, McKinsey has said that litigation-free land can boost economy growth rate by 1.3%,” said Dharmana Prasada Rao, Revenue Minister, Andhra Pradesh.

But concerns remain. An earlier decision to free up the Floor Space Index in Hyderabad was expected to bring down property prices. Instead, stringent conditions attached to the new rules, fuelled a 50% increase in realty prices. Land in Hyderabad currently costs between Rs 40 lakh to a whopping Rs 55 crore an acre. So, even a small reduction in land prices will be a blessing for residents.

By Sandhya Ravishankar and Krupali Pandit Yadav, CNBC-TV18