In India, it is undoubtedly Metro time. Bangalore, Delhi, Kolkata, Jaipur and Chennai are not just popularly known cities across India but also have one other thing common. All these cities are blessed with metro connectivity. Kolkata was the first city to be blessed with metro connectivity in 1984, followed by Delhi in the year 1995. The success stories of Metro services in Delhi and Kolkata paved the way for metro in others metropolis such as Mumbai, Bangalore, Gurgaon and Jaipur. In 2015, the beginning of Metro operations was seen in Jaipur and Chennai, along with the extension of Metro lines in Bangalore and Delhi. These cities show a consistent positive change after the evolution of metros along their metro corridors.
International case studies confirmed that Metro rails and monorails have contributed to solve traffic problems in India. In addition, the existence of Metro stations directly impact realty sector through rise in value of properties. In 2015, a huge impact of Metro has been noticed with respect to real estate in several cities.
Impact of Metro Rail on Realty Sector
Property prices in India fluctuate a lot depending upon a number of factors and metro rail is one of them. The evolution of Metro directly impacts real estate through hike in land prices along the metro corridor. Commercial and retail sectors have expanded due to improved accessibility. On the other hand, residential area received a dual demand driver. Improved connectivity would attract more organizations to set up their offices in the area which results in more job opportunities. Most of the property buyers are also attracted by the less travel time to work, and this will lead to a sharp rise in sales and increased capital values near the Metro stations.
-The value of land is high which lies within the walking distance from station, but not next to the station.
-The demand of office spaces and retail around active metro stations is very high.
-Most standalone units near Metros converted into apartments and new development activities are taking place on barren land.
According to past records, the BSP (Basic Sale Price) of properties will go up by more than 50% after the launch of Metro rail, depending upon the micro-market’s overall potential. Once the metro is operational, the population density of nearby regions will definitely increases because of proximity preference. All in all, a win-win situation for realty sector in India.
Once the metro is operational, there will invariably be regulatory changes taking shape in the region. To fulfill the needs of urbanization in the Metro areas, the government is granting extra Floor Space Index (FSI) along the corridor to address the particular needs of housing development. This increased FSI will result in increased land prices along the Metro corridor.
Needless to say, this imposes stress on the existing developments and infrastructure in the area, which the govt. must tackle along with the Metro evolution.