By Chetan Patel,
It is often said that ‘a city is what it offers its residents.’ The upsurge in infrastructure in terms of robust road network, connectivity and public conveyance adds value to any specific area or city, especially the housing projects built around the area.
Any home buyer when attempting to purchase a house, the first thing he subconsciously asks about is the place’s connectivity with other parts of the city. This is the reason why housing projects that have opposite infrastructure around are more in demand and even costlier.
Similarly the projects that are situated in proximity to metro stations or even local train stations are dearer. Several builders and developers ascertain this proximity as the USP of their projects. We all must have come across builders who, in the list of their project’s amenities, talk about the distance from the nearest metro station or sometimes even the highway.
The price of properties escalates even when infrastructure is at the proposal stage or just in pipeline. Homebuyers have a tendency to get inclined towards the projects that are laced with proper infrastructure and connectivity even if they have to shell out a few extra bucks for it.
While accessibility and connectivity plays a major role. Moreover infrastructure also plays a crucial role in the appreciation of rates of the project. For example, if we talk about metros like Mumbai, the cost of flats in the city is skyrocketing, especially suburbs and one of the major reasons is that suburbs now have strong infrastructure, in terms of connectivity to the airport, the railway station and other major parts of the city.
This is also a reason why so many office spaces and business parks have been promoted around Mumbai’s suburbs boosting commercial real estate development. Moreover, people want to live in areas where it’s easier for them to commute for work. Another major infrastructure development is the coastal road. It will provide much-needed relief for choked traffic that has become an ugly reality of Mumbai’s suburban city commute. The pressure on traffic at road and rail will ease out tremendously. But above all, the enhanced connectivity will improve living standards and help promote economic growth due to more opportunities of easy connection to many commercial hubs of the city. This will again boost real estate development in the areas close to coastal roads.
In the past few years a new term ‘metro effect’ has come into existence. And it’s most certainly a part of the infrastructure that drives the realty market. Most metropolitans and tier I cities circle around metro lines. The commercial and real estate projects that are erected around the metro route are much costlier than others because any new homebuyer trying to purchase a house wants to have one near a metro station so rate appreciation becomes directly proportional. And this in turn boosts the growth of the real estate sector too, attracting more development.
Also, it has been observed that one of the two major determinants of Foreign Direct Investment (FDI) is presence of good infrastructure measured by the infrastructure index. So, it would be totally appropriate to say that proper infrastructure attracts as well as escalates development in a city.
(The author is Director, Gurukrupa Group. Views expressed are personal and do not reflect the official position or policy of the Financial Express Online.)