Industry experts believe that better connectivity is perhaps one of the most important drivers of demand as far as real estate is concerned.
There are many factors that usually influence the demand for residential units — some of which are builder’s reputation, pricing of housing units, household income, government policies, mortgage availability and interest rates, among others. However, apart from these, better connectivity and proximity to commercial hubs are also the key factors which drive the demand for housing.
Industry experts say that better connectivity is perhaps one of the most important drivers of demand as far as real estate is concerned. Take, for instance, the Noida real estate market. The launch of the Aqua Line in January this year has positively impacted the home rental markets in neighbourhoods, which are now connected through the Metro network. The extended Blue Line is also seen as boosting the prospects of the rental real estate market in the city.
“This co-relation between connectivity and demand for residential real estate was also seen in the Jewar airport case. Rates of land near the planned airport, which is expected to create millions of jobs, have increased manifold. As against Rs 4-5 lakh in 2015, rates have gone up to Rs 25 lakh a bigha now. Farmers whose land is being acquired for the project are also being offered three times the circle rate. While the prevalent land rate in the area is Rs 900 per square metre (psm), the government is offering Rs 2,300 psm,” says Dhruv Agarwala, Group CEO, PropTiger.com/ Housing.com/ Makaan.com.
Similarly, sales of affordable homes increased in Gurgaon’s affordable pockets after the completion of the peripheral expressways this year. Data available with PropTiger.com show that about 60 per cent of the units sold in Gurugram during the April-June quarter were homes priced within Rs 25 lakh that are located in peripheral areas. “In a city such as Gurugram, which is primarily known for properties being pricey, this could happen only because of improved connectivity to far-flung pockets,” adds Agarwala.
Property developers believe that residential and commercial developments go hand-in-hand. “They both complement each other as they both are necessity for a better living. Home seekers have always preferred residential projects which have close proximity to commercial hubs and are also well connected. A buying decision is based on 3 primary factors — how good the developer & project is, how well connected it is, and how close to commercial hubs is it. In fact, rental market is more influenced by such factors as a rentee doesn’t look at future returns, but is more concerned by immediate benefits of connectivity and commercial developments,” says Manoj Gaur, MD, Gaurs Group, & Chairman, Affordable Housing Committee, CREDAI.
Presence of social infrastructure is another factor which buyers take into account while opting for a piece of property.
Uddhav Poddar, Director & CEO, Bhumika Group, says, “Proximity to good-quality social infrastructure is a key factor for any buyer while making a decision to buy his house. Hence residential projects which have a close proximity to good malls, schools and hospitals or residential projects which are part of mix use projects are likely to sell out much faster as compared to stand-alone residential projects which are not in close proximity to social infrastructure.”
Ashish Bhutani, CEO, Bhutani Group, also says that except for some luxury and themed projects that sell solitude as the USP and are meant for the HNIs who want a quiet place away from the maddening crowd, all other projects have to provide proximity to commercial developments. “If not offices, at least malls, hospitals and schools should be in the vicinity or at a comfortable distance from the project,” he says.
Some developers, however, believe that although schools and hospitals are a necessity, they shouldn’t be too close to one’s home.
Pradeep Aggarwal, Co-Founder & Chairman, Signature Global and Chairman, ASSOCHAM National Council on Real Estate, Housing and Urban Development, says, “In commercial, the most important thing that has to be near a project is the marketplace. Without it the projects will not take off. The commercial development has to be close to the project so that the daily and weekend needs of homebuyers can be met. In case of schools, it is suggested that they should be at a distance from the residential projects as in many cases having a school nearby leads to traffic jams and residents want to avoid it. So, hospitals and schools have to be in the vicinity, say, at a distance of 5-10 km, that can be easily covered.”