Robust infrastructure contributes to the overall development of the city
Homebuyers tend to look to projects with the right infrastructure and connectivity, even if they have to fork out a few extra bucks for it.
By Chetan Patel,
It is often said that “a city is what it offers its inhabitants”. The upsurge in infrastructure in terms of robust road network, connectivity and public transport adds value to any specific area or city, especially housing projects built around the area.
Any homebuyer when trying to buy a home, the first thing they subconsciously asks for is the location’s connectivity with other parts of the city. This is the reason why housing projects that have opposing infrastructures around are more in demand and even more expensive.
Likewise, projects located near metro stations or even local train stations are more expensive. Several builders and developers qualify this proximity as USP for their projects. We have all had to come across builders who, in the list of developments for their project, talk about the distance from the nearest metro station or sometimes even from the highway.
Property prices rise even when the infrastructure is at the proposal stage or just under development. Homebuyers tend to look to projects with the right infrastructure and connectivity, even if they have to fork out a few extra bucks for it.
While accessibility and connectivity play a major role. In addition, infrastructure also plays a crucial role in the assessment of project prices. For example, if we are talking about subways like Mumbai, the cost of apartments in the city is skyrocketing, especially in the suburbs and one of the main reasons is that the suburbs now have solid infrastructure, in terms of connectivity with the airport, the train station and other large parts of the city.
This is also a reason why so many office and business park spaces have been promoted in the suburbs of Mumbai, thus boosting the development of commercial real estate. In addition, people want to live in areas where it is easier for them to get to work. Another major infrastructure development is the coastal road. It will bring much needed relief from the smothered traffic that has become an ugly reality of daily commutes in the suburbs of Mumbai. The pressure on road and rail traffic will decrease considerably. Most importantly, the improved connectivity will improve living standards and help promote economic growth due to more opportunities for easy connection to many of the city’s shopping malls. This will again stimulate real estate development in areas close to coastal roads.
In recent years, a new term “metro effect” has emerged. And it is most definitely a part of the infrastructure that drives the real estate market. Most metropolises and Tier I cities revolve around metro lines. Commercial and real estate projects that are erected around the metro line are much more expensive than others, as any new buyer trying to buy a house wants to have one near a metro station, so the rate appreciation becomes directly proportional. And it also stimulates the growth of the real estate sector, attracting more development.
In addition, it has been observed that one of the two main determinants of foreign direct investment (FDI) is the presence of good infrastructure as measured by the infrastructure index. Thus, it would be quite appropriate to say that a suitable infrastructure attracts as well as intensifies development in a city.
(The author is Director, Gurukrupa Group. Opinions expressed are personal and do not reflect the official position or policy of Financial Express Online.)
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