On May 31st 2016, Eenadu daily published a banner headline ‘Addagolu Addelawada’ — Abnormal increase in rents in Vijayawada. The analysis presented in the article lacks logic and the writers of this article missed the basic supply and demand principles. Since Vijayawada has been crowned as the capital of erstwhile Andhra Pradesh, there has been a surge in business activity in the region. Also, as the government of A.P expedited the process of moving the capital to Amaravati, there is going to be an huge inflow of new tenants in the area. Naturally, since the demand has gone up and the supply is constrained, the rental prices have gone up.The article in largest circulated daily tends to put the blame on house owners, projecting them as greedy.
Ramoji group has a number of properties in prime areas in Vijayawada. Hasn’t the group increased the rentals of their properties in the last 1 year? Would Ramoji group rent out a property at the same price as they did last year? Everyone is aware of how Ramoji group benefited from abnormal increase in land prices in Hyderabad. Did Eenadu ever complain about these spurt in land prices and how common man suffered due to this?
Article mentions there are thousands of ‘to-let’ boards in Vijayawada.The main desk in Eenadu seems to have forgotten that this is a capitalistic economy and the market corrects itself. If owner is past a threshold waiting time, he is going to rent it out at a reduced rate. That is how the rents come down and media group cannot be hypocritical when most of the intrinsic value of the business empire is due to abnormal increases in land prices.
