PM Modi relaunches Amaravati projects: What it means for Andhra’s capital revival and real estate market
PM Modi’s revival of key Amaravati projects is expected to boost investor confidence, say real estate experts
Prime Minister Narendra Modi on May 2 inaugurated and laid the foundation stone for projects worth ₹58,000 crore in Andhra Pradesh, including the revival of construction work on the greenfield capital city of Amaravati, Chief Minister N Chandrababu’s ‘dream project’. Real estate experts said the move is expected to boost market sentiment, bringing renewed clarity and confidence among developers and investors.
The Prime Minister inaugurated and laid the foundation for 94 projects, including capital city institutions, national highways, railway upgrades and defence-related installations, PTI reported.
As part of resuming the construction of Amaravati, the PM laid the foundation stone for 74 projects worth ₹49,000 crore, which encompassed the construction of the Assembly, Secretariat and High Court buildings and judicial residential quarters, along with housing buildings for 5,200 families, PTI reported.
"Amaravati is not a city but a dream coming true… A new Amaravati, a new Andhra, can be seen. Energy of a Developed India can be seen in Amaravati. The development works launched today will strengthen infrastructure and accelerate the growth of Andhra Pradesh," PM Modi said.
Also Read: Amaravati springs back to life ahead of PM’s visit
According to a PTI report, the PM laid the foundations for infrastructure and flood mitigation projects featuring a 320 km long world-class transport network with underground utilities and advanced flood management systems in the greenfield capital city. The land pooling scheme infrastructure projects will cover 1,281 km of roads equipped with central medians, cycle tracks, and integrated utilities across the greenfield capital city of Amaravati.
The idea of Amaravati as Andhra Pradesh's capital was CM Chandrababu Naidu's brainchild, floated during his chief ministerial term between 2014 and 19. However, the strategically chosen city in the heart of Guntur district is said to have witnessed a setback under successor Y S Jagan Mohan Reddy’s tenure.
Real estate developers optimistic about the revival of construction in Amaravati, the new capital
With PM Modi laying the foundation stone for 74 projects in Amaravati, the real estate sector in Andhra Pradesh, particularly in Amaravati, is set for a revival, said Bayana Srinivasa Rao Garu, president, CREDAI Andhra Pradesh.
"Over the last six months, we've observed a positive shift in sentiment among developers and investors," he said, adding that clarity and confidence have returned to the market, especially following the renewed political support for Amaravati and the active involvement of CM Naidu since last year.
Previously, uncertainty among investors had stalled momentum. “Investors need assurance that their investments will lead to appreciation and that clarity is now emerging,” he said.
He said that government authorities are offering support and incentives to developers, which is helping to kickstart activity. Rao said he expects a 15–20% land price increase over the next six months as investor activity rises.
He also emphasised the strategic importance of the Krishna and Guntur districts, which are central to the Amaravati region and offer prime locations for future development.Also Read: Real estate sector abuzz as Amaravati development picks up pace
Property prices in Amaravati
According to GV Jagdish, a Hyderabad-based realtor at Hanu Reddy Realty, the average land rates in the region range between ₹25,000 ₹30,000 per sq yard, while built property costs hover around ₹4,000 per sq ft. Land prices vary depending on location, with agricultural plots on the outskirts priced at ₹2–3 crore per acre and prime land in the Amaravati-Guntur belt, a key growth corridor, being quoted as high as ₹5–10 crore per acre, he said.
The future of real estate investments in the region will largely hinge on the government’s roadmap for Amaravati. “If the declared plans are implemented steadily, that will drive confidence and capital into the region,” he said.
Amaravati - the new capital
Amaravati was designated as the new capital of Andhra Pradesh following the state's bifurcation in 2014. The Amaravati Master Plan, crafted by the renowned UK-based firm Foster and Partners, envisions a comprehensive development over 217.23 square kilometres between Vijayawada and Guntur.
Inspired by Singapore, the ‘sustainable city’ was planned to be connected by e-buses, water taxis, metros, and bicycles. The project of converting the city into a capital also comprised the construction of flats for bureaucrats, legislators and staff of the state’s secretariat.
As per a report published in the Hindustan Times, the estimated budget for Amaravati's developmental works as arrived in 2024 was about ₹64,910 crore, and Phase-1 of the project is to be completed over the next three years, officials said.
Of the project cost, the Government of India committed ₹15,000 crore in financial assistance in 2024 and facilitated the World Bank and the Asian Development Bank's support to the tune of $800 million each (agreements signed).
HUDCO has already signed an agreement to extend a loan of ₹11,000 crore, while discussions are in pipeline with Kfw for ₹5,000 crore, the report had said, adding other potential funding sources are being explored.
