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Infrastructure & Real Estate: Busting the Dilemma of Ages

Infrastructure & Real Estate: Busting the Dilemma of Ages
While it has been understood for centuries that real estate and infrastructure are two separate things, the reality is a bit different. Infrastructure is an idea, while real estate is its tool of execution. Infrastructure, by definition, is the fundamental facilities and systems in a city, country, or area, including schools, transportations, industries, etc. Now how does one aims to achieve this concept? By the means of construction, that is, through real estate.


MythBuster Tanya

Contrary to popular belief, infrastructure and real estate are mutually inclusive entities that heavily influence each other. In the findings released by Infrastructure 2014: Shaping the Competitive City report of 2014, about 400 real estate and public sector officials agreed that a highly developed infrastructure depends on its real estate and plays a pivotal role in influencing real estate investments. Infrastructure, in a way, can be thought of as a subset to real estate. Let us see how these two influence each other.

Influencing the Value

In 2006, when the Delhi Metro was announced in Gurgaon, the rates of Essel Towers, a society in the same region, increased by 50%. When infrastructural projects began shaping up in an area, it heavily influences its real estate market because these developments become a part of the USP for the property owners, kind of like an attraction. An estimated 50 – 70% increase is seen in the price when the infrastructural initiatives are in their operational phase. This happens because these developments directly translate into a more comfortable and connected living for residents. Having said that, the influence also depends upon the kind of assignment the authorities have given a go ahead for. For example, if the government wants to construct an airport near a residential area, this sort of development might actually depreciate the value of property in that area. Something similar happened with Crossing Republik Township on NH-24 Ghaziabad. A massive strip of land lay right across the township and it was to be converted into a landfill/dumping ground. While the dispute was in its furore, the rates of apartments in the region decreased significantly. After a long battle with the authorities, the realtors were finally able to lift the proposal and the rates rocked back to normal.

Accessibility towards a Better Life

Imagine what would happen if the nearest hospital to your home is about 30 km away. Would you be willing to travel that far for serious but non-threatening condition? And God forbids, but if something terrible happens? When a city or a state is well planned, one of the basic factors influencing its value is the accessibility its infrastructural plan provides to the residents. Construction of flyovers, underpass roadways, multilane corridors, etc. makes connectivity a significant factor when selecting a place to live. When it comes to metropolitan cities like Delhi, these plans are especially important because of the traffic conditions in these cities. Recently, an announcement by China became a butt of jokes when they claimed that in the face of war, they can reach New Delhi in 48 hours. People, especially residents of Delhi, laughed at the claim saying that it is impossible to cover few kilometres within 2 hours in Delhi given its traffic conditions, and it is simply absurd to think that they can reach the capital from a separate country in 48 hours! And it is true. During the rush hour, it is impossible to reach home within an hour or so even if it is merely 10-15 km away from your workplace. When encountered with such problems, infrastructure developments are the saving grace of the city for its residents. Accessibility makes way for opportunities which in turn influence the overall development of a community.

Scale of Progress

Not talking about the education system adopted by our country, but how does one generally calculate the efficiency of a child’s brain? By watching its overall progression. Similarly, the infrastructure of a city and its influence of the real estate economy is a direct measure of its development. If one thinks about it, the realty projects affect the infrastructure of that region and vice versa. Almost a decade ago, Greater Noida was nothing more than a vast land with a cluster of about 16 villages spread across it. In 1990s, when the government of Uttar Pradesh decided to develop this extension of Noida into a world class city, did Greater Noida come into existence. As real estate projects started developing, people from around the capital and NCR started swarming the societies, owing to comparatively reasonable prices and proximity to Delhi and major cities of UP like Mathura, Agra, etc. When the government saw an exponential growth in occupancy, they decided to increase connectivity and introduced Delhi Metro to the city. Conclusively, the development in infrastructure thoroughly affects the real estate market which directly influences the economy of the city, giving a full measure of its progress.

So, what separates Real Estate from Infrastructure? Nothing, absolutely nothing. Each of them is consequential to the other and exists in resonance. It is time we stop viewing real estate as a separate factor and invest in it while bearing in mind that we are actually contributing to the infrastructure of a society, and it is not only authorities that are responsible for its development; we too have a significant role to play by promoting and preserving our place of residence.

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