HYDERABAD: Renting a home in Banjara Hills could well be cheaper than renting one along Vijayawada’s Bandar (or MG) Road these days. At least that is what current residential lease rates in the two states seem to indicate.
Racing fast ahead of Hyderabad, average house rents in this part of Andhra Pradesh’s commercial capital also part of the new capital region- have touched a staggering Rs50,000 or more over the last two years, market estimates suggest. In fact, exclusive plush complexes are even attracting monthly rents as high as Rs1-Rs1.5 lakh! To then imagine that homes in the coastal city never costed a leasee any more than Rs30,000 until a few years ago, is now a tad bit difficult.
Also, while the residential growth in the joint capital is primarily restricted to the western stretch – courtesy the steady influx of a large migrant population – in Vijayawada, the numbers are rising across all corridors.
“In Hyderabad, house rents have become more or less stable as there is sufficient supply flowing into the market. The situation in Vijayawada is very different. There is more pressure on the market, which has led to a spike in rentals. But this is only momentary (sic),” said Veera Babu, managing director, Cushman & Wakefield (Hyderabad).
Local industry insiders agree that the current rents are grossly inflated and will start moving southwards once the new capital city of Amravati is developed. “The last two years have seen tremendous movement towards Vijayawada.Apart from government employees transferred here, members of the business class too have moved in the hope of exploring new avenues. As a result, the demand for residential spaces have shot phenomenally,” said Rajling Gadde, chairman of the capital region builders’ association.
To buttress his point, he cited the example of east (or rural) Vijayawada that until recently did not command rents anywhere above Rs6,000 a month. Now, certain pockets here up for grabs for as much as Rs15,000 to Rs20,000. “But as soon as the capital starts sporting better infrastructure, this crowd will shift there,” Gadde said. Perhaps that explains why residential sales haven’t seen any growth in Vijayawada, the demand of houses notwithstanding. Rough estimates show, there are close to 25,000 to 30,000 ready-to-occupy flats lying vacant in Guntur and Vijayawada. “That’s another difference that the coastal city has with Hyderabad, where residential sales – and costs -are steadily increasing. In Vijayawada, there are no sales at all. People are only expressing interest in the rental market,” Shiva Reddy , president, Confederation of Real Estate Developers Association of India (Credai, AP chapter), reiterated.
But much unlike both Hyderabad and Vijayawada, Visakhapatnam has seen little traction in the rental market. Reason: no spurt in migration, say industry observers. “The demand-supply gap here is neither too high nor too low due to which prices have remained the same. Also many people are now moving to suburbs like Madhurawada, PM Palem because the rentals are cheaper there,” said former Credai chairman, Ramakrishna Rao, forecasting no change in this pattern at least for another couple of years.