Synopsis: Amaravati’s capital city project is resuming its momentum and investors are now looking at the early growth story of Hyderabad post bifurcation. Amaravati is now a high risk, high growth real estate opportunity for the next decade, while Hyderabad is still making stable and proven returns.
For years, Hyderabad had the status of being the undisputed powerhouse of South India’s real estate industry, due to the presence of the IT industry, global companies, excellent infrastructure and steady appreciation of property values. But now, another city is slowly being added to the list: Amaravati. Massive infrastructure announcements and the revamped initiative by the government of Andhra Pradesh to bring Amaravati to life have again led investors to ask a big question; Will Amaravati be the “Next Hyderabad”?
Amaravati is a high risk-high growth opportunity for the real estate sector in Hyderabad, which already has a well-developed and stable economy with IT corridors, metro connectivity, and premium housing demand.
Why is Hyderabad the Investor Favourite After Bifurcation?
After Andhra Pradesh and Telangana becoming two states in 2014, Hyderabad was obviously the first destination that came to mind for investors due to its well-established urban structure, good infrastructure, IT hubs and numerous international businesses. The demand from the tech professionals and companies was on the rise and areas such as HITEC City and Gachibowli were growing fast.
The city also provided stability, something that was lacking in Amaravati at the time. Amaravati was being considered as a new capital of the state with not a definite timeline yet, while Hyderabad already had a metro, Rajiv Gandhi International Airport, a good demand for rentals, and regular appreciation of property values. This gave investors a degree of comfort to invest in Hyderabad which they were not willing to do when Amaravati development started.
Why did Amaravati failed Initially?
The city had problems attracting long-term investments due to the fact that the development was still on paper. Investor confidence was dampened by frequent changes of government, lack of funding, lack of progress on infrastructure and the uncertainty of the capital city plan.
However, the situation is gradually changing these days. The Amaravati capital project is a rejuvenated initiative by the Andhra Pradesh government, addressing infrastructure, connectivity, and administrative development. This has revived the investors interest particularly NRIs and Andhra investors who have an eye on Amaravati as an investment opportunity with lesser investment cost than Hyderabad in future.
Best Areas in Hyderabad to Keep an Eye on
Best areas to watch out in Amaravati
Currently, Hyderabad has better and stable returns with good rental yields, whereas Amaravati has more of a future growth story with returns to be determined more by the quality of execution of infrastructure and the government’s development plans.
Also read: How PM Modi’s Work-From-Home Appeal Could Reshape India’s Real Estate Market
Conclusion
Both Hyderabad and Amaravati are quite different markets for investors with a longer time horizon of 3 years. Overall, Hyderabad is stable and secure to invest in real estate, supported by its well-developed infrastructure, robust demand for rental properties. It is best suited for investors who want to reduce risk and have a steady income.
Amaravati is a high-risk, high-reward opportunity, however. The region may see long-term appreciation if the government is able to keep the infrastructure and capital city projects foreseen by 2028. Amaravati may turn out to be one of the biggest real estate stories in India in the next few years for the aggressive investors who are ready to take the risks and are looking for investments in the future. In the end, it is entirely based on investment style and the risk appetite. Amaravati has a future potential while Hyderabad is a more stable choice.
Written by Boyapati Sai Jasmitha
