VIJAYAWADA: For long, it was the non-resident Indians (NRIs) who boosted the demand in the realty sector in Andhra Pradesh. But for the first time in decades, the trend is on the decline with many NRIs shying away, say realtors, adding that Hyderabad has now become their favoured investment destination.
Andhra Pradesh is among the country’s top five states in number of people settled abroad. Many invested in properties, both residential and commercial, in their home state. As land is a scarce resource in many urban pockets in AP, unlike in neighbouring Telangana, the demand used to be high.
“Till two-three years back, a good real estate venture used to get NRI investments in the range of 40-50%. The demand from NRIs drove the market for decades in this part of the region, especially in Vijayawada, Guntur and Visakhapatnam. But now investments hardly exceed 20%,” Tummala Vamshi Krishna, general secretary (Vijayawada chapter) of Builders’ Association of India, told TOI.
AP received Rs 19,320 crore in terms of foreign remittance in 2018 and a major portion was invested in the real estate sector.
P Sunil, a Vijayawada-based builder, added that they used to sell many properties citing NRI investments. “It was used as the USP (unique selling proposition) of many projects.
NRIs were not only just demand boosters, they also acted as market triggers. They added some glamour factor to our business and helped us maintain the market momentum. But now, as they are turning away from the state, they are also pulling down the demand,” he rued.
Vamshi Krishna admitted that NRI investments have dropped in recent times due to uncertainty over capital. “The value of properties on which they have already invested has come down by nearly 50-60%. So, they are heading towards Hyderabad where the realty market is attractive and wealth is getting compounded faster,” he observed.
