Amaravati, Guntur, and Vijayawada, South India's Rising Residential Destinations for 2024 – Magicbricks Report
South India is witnessing a shift in its residential real estate landscape, with Amaravati, Guntur, and Vijayawada emerging as prominent residential destinations in 2024. According to Magicbricks, these cities have seen significant growth in demand, with the preferences of over 2 crore customers on the platform indicating the rising popularity of these locations for homebuyers.
Among these cities, Amaravati has emerged as a clear leader in terms of demand, with a year-on-year (YoY) increase of 49.10% in residential search activity. The demand surge in Amaravati is indicative of the city’s growing appeal as a residential destination. It is followed closely by Guntur, which has seen a 38.27% YoY growth in searches. Vijayawada, too, has experienced a 31.95% increase in residential searches, reflecting the overall trend in the region. These numbers suggest a shift in the real estate focus, with homebuyers increasingly looking beyond the traditional major metropolitan areas and considering these emerging cities in South India.
This growing interest in Amaravati, Guntur, and Vijayawada has been driven by a combination of factors. For one, all three cities offer relatively affordable pricing compared to major urban centers like Hyderabad, Chennai, or Bengaluru. This has made them attractive to homebuyers seeking affordable housing options in a rapidly developing region. Furthermore, the ongoing infrastructure improvements and government initiatives aimed at boosting the development of these cities have contributed to their rising demand.
However, while demand has been increasing, the supply of residential properties in these cities has not kept up. The number of listings in these areas has seen a significant decline, further exacerbating the demand-supply mismatch. Residential listings in Guntur have decreased by 22.57% YoY, while Amaravati saw a 6.7% drop in available listings. Vijayawada, similarly, experienced an 18.46% decrease in residential supply. This reduction in the availability of properties, coupled with the growing demand, has caused a sharp rise in property prices in these markets.
In Vijayawada, the average residential price has surged by 20.06% YoY, reaching INR 5759 per square foot (psf) in Q3 (Jul-Sep 2024). This significant increase in prices highlights the growing demand for residential properties in the city. Guntur has also seen an increase in prices, albeit at a slower rate of 3.27% YoY, bringing the average residential price to INR 4962 psf. Amaravati has experienced a similar upward trend, with prices rising by 3.29% YoY to reach INR 4470 psf.
The rise in prices can largely be attributed to the limited supply of properties in these cities. Developers have been unable to keep up with the growing demand, resulting in higher prices for the available inventory. This has made the market increasingly competitive, with prospective buyers now having to contend with rising prices and a limited selection of properties.
The growing appeal of these cities can be attributed to several factors. Amaravati, Guntur, and Vijayawada have been experiencing rapid urbanization and infrastructure development, making them attractive to homebuyers looking for modern amenities and better connectivity. These cities are also benefiting from government initiatives aimed at fostering growth in the region, such as the establishment of new industrial zones, improved transportation networks, and the development of smart city projects. These developments are expected to further boost the demand for residential properties in the coming years.
Additionally, these cities are well-connected to major economic hubs in the region, offering a balance between suburban living and proximity to urban centers. The rising demand for homes in these areas is also being fueled by the growing migration of people from smaller towns and villages to these cities in search of better employment opportunities and quality of life.
In Amaravati, the state government’s plans to transform the city into the capital of Andhra Pradesh have also played a key role in increasing its residential demand. The city’s master plan, which includes the development of administrative buildings, commercial hubs, and residential zones, has attracted significant investment in real estate. Guntur and Vijayawada have also benefited from their proximity to Amaravati, with many homebuyers viewing them as ideal locations for affordable housing with easy access to the city’s planned developments.
Despite the positive trends, the mismatch between supply and demand in these cities poses challenges for prospective buyers. With the ongoing price increases and limited property options, many homebuyers are finding it difficult to enter the market. As a result, there is an increasing need for developers to address the growing demand by accelerating construction projects and ensuring a steady flow of residential properties to meet the needs of the market.
Amaravati, Guntur, and Vijayawada are witnessing significant growth in residential demand, driven by the factors of affordability, infrastructure development, and government initiatives. However, the imbalance between supply and demand is leading to higher property prices, making these cities both attractive and competitive for potential homebuyers. As these cities continue to evolve and develop, they are poised to become key players in South India’s real estate market, attracting further interest from both homebuyers and investors.
