Indian cities are all getting on board the metro bandwagon after the demonstrations in NCR, Bengaluru and Chennai on ease of travel. Decongestion and easy mobility are the key advantages of living near a metro. But there is another industry that is smiling whenever metro spreads its reach – the real estate market. Proximity to any transportation network tends to raise real estate prices in the area – this is true for home prices and commercial prices. Land usage around the metro station areas also changes with more concentration on housing projects.
Internationally it was seen that when the metro was inaugurated in Finland, London Docklands, France and Austria, the property values within a radius of 200m from the metro station rose by 2% and the rental values rose by 11%. For metros closer to the commercial districts and downtown areas there was a leap in development with commercial properties developed rising by 7.5% and the number of housing units within a radius of 500 – 750 m increased by 7-10%, even in remote areas, as detailed by a real estate research agency.
The values of housing market tend to increase first when the project is announced – in terms of rental values. The land values for residential construction do not see a big leap. The commercial spaces on the other hand sees an increase in value only on completion of the metro project but the land value for commercial sees a significant increase in value on announcement of the metro project.
In Bengaluru it was reported in May 2016, that property prices of location around the metro station areas skyrocketed with some areas seeing prices double from the years when metro was not present. The prime area such as Indiranagar, Richmond Road, Vasanth Nagar and Cunnigham road in Bengaluru saw a significant rise whereas suburbs in West Bengaluru such as Nagarbhavi area saw their property value double.
Pune is another city that saw a 20% surge in property prices just at the announcement of Metro routes construction. Watching the larger cities reap the indirect benefit of the metro presence, the Pune real estate market is already surging. So if you are looking to buy in the areas of Kalyani Nagar, Chichwad, Vanaz or Swargate then you might get more options also as several new projects have started since the metro announcement two years ago.
Any infrastructure project indirectly brings a big change to the real estate value in the nearby areas but Metro has been the most significant cause as it runs through prime locations and suburban locations of the city. This has helped in seeing a wider impact on real estate housing and commercial markets across the cities today.