Vijayawada’s housing market has outperformed most tier-II Indian cities, compounding at approximately 4.5% annually in real terms. Price growth was strongest during 2015–17 and 2023–25, dipped notably during the pandemic, and now sits at a city-wide average nominal high of ₹6,199/sq ft in Q2 2025 .

1. Macroeconomic & Policy Backdrop

The city’s GDP rose from $3 billion in 2010 to an estimated $17 billion in 2025, propelled by logistics, food processing, and IT services .

Three major policy shifts shaped land values:

1. Amaravati announcement (2015): Triggered speculative trading, pushing NHB HPI up by 14% YoY .

2. RERA rollout (2017): New launches fell by 28%, but end-user confidence improved .

3. COVID lockdown (2020): Primary sales dropped 42%, dragging under-construction price index to a 7-year low by mid‑2021 .

2. City-Level Price Trajectory

2.1 NHB RESIDEX HPI (Assessment Price where 2017–18 = 100)

This reflects a ~31% cumulative nominal gain since 2015, equivalent to ~17% in real terms after correcting for inflation .

2.2 City-wide Average Prices (₹/sq ft)

3. Micro-Market Performance

4. Product Mix & Developer Behavior

• Apartment dominance: 52% of new primary sales (vs 35% in 2015); villas now just 6% as buyers favor security/amenities .

• Smaller formats: Median 3 BHK size fell from 1,780 sq ft to 1,610 sq ft due to affordability and RERA transparency .

• Stronger developers: Grade‑A builders now account for 68% of approvals (up from 41% in 2016) as banks prefer RERA‑compliant sponsors .

5. Rental Market Snapshot

• City-wide gross rental yield averages 2.9%.

• Top-performing micro-markets: Kesarapalli (3.4% for studios), Kanuru (3.2%), Benz Circle (3%) .

• Despite moderate yields, low vacancy rates (~under 6%) maintain strong investor interest.

6. Cost Pressures

Construction cost index (CIDC, Oct‑2007 = 100) rose from 126.7 in 2015 to 135.9 in 2021—a 7.3% real-term rise driven by steel and cement inflation . Developers passed this through via price hikes during 2022–24.

7. Outlook (2025–30)

• Base case: 3–4% annual nominal appreciation; NHB HPI could reach ~135 by 2030 with stable mortgage rates.

• Bull case: Up to 6% CAGR if Amaravati and Kesarapalli IT park drive consumption demand .

• Bear case: Flat or negative growth if GST rises to 8% or stamp duty reverts to pre-2020 slabs.

Conclusion

Over the past decade, Vijayawada has matured from a speculative land market into an end-user-driven ecosystem. Infrastructure momentum, policy reforms, and diversified economic growth have enabled mid-single-digit sustained price rises through 2030.

Key Takeaways

• Nominal gains: City-wide prices rose ~31% from 2015 to 2025, outperforming CPI by ~14 pp.

• Yields: Modest rental returns (<3%) but high occupancy sustains demand.

• Segmentation: Developers are focusing on compliant, compact apartments.

• Future catalysts: Amaravati corridor execution and IT-park occupancy remain primary growth drivers.