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Land prices may increase in AP

Comments(3) Sub Category:Cities,Other cities,Real estate trends,Realty News Posted On: Feb 25, 2013

Land prices in APVijayawada – Andhra Pradesh government is planning to increase the market value of land and development charges which may result in increased prices of house sites and apartments in all cities of the state including surrounding areas.

Taking example of Vijayawada city in Krishna district, currently the land value is around Rs 40,000 to Rs 60,000 per square yard. Builders are offering flats at a cost of more than Rs 50 lakh each. Thus people are not coming forward to buy such high priced flats. This in turn is demotivating builders to construct residential projects in Vijayawada.

According to the city general secretary of Confederation of Real Estate Developers Association, middle class people would be highly affected by increase in land prices. This class of people will not be able to buy apartments on the city outskirts also.

He pointed out the registration amount paid by people who purchase apartments in the city. It is currently Rs 2.5 lakhs which include stamp duty, sales tax and service charges. If the government increase the land prices, then the registration charges may go up to Rs 3.5 lakh.

The Krishna district is affected by Telangana issue which resulted in low market demand. Thus to summit in one line, this district does not possess any market and increase in land prices will completely collapse the real estate sector of the district.

According to some builders, this increase in land prices may not affect the real estate sector in this region. This step by state government is taken to bring the land value close to the market value. This will help to net highest revenue through stamp duty.

As per an official of Vijayawada, Guntur, Tenali, Mangalagiri (VGTM) urban development authority, this step by state government to increase land prices shall increase the prices of house sites. He highlighted the number of applications (14,000 ) received by urban development authority under layout regularisation scheme. This scheme was implemented till December 31, 2012. Around half of them were cleared and the rest are pending. The concerned land applications were also regularised.

Now with increase in land prices, people possessing housing site will have to pay development charges at the rate of 14 per cent of the land value. These charges will be paid at the time of applying for building plan.

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