Thursday, 23 June 2016

How Metro Rail has become a big multiplier for real estate

The metro rail has become a lifeline for cities like Delhi and Mumbai, and due to its huge success the implementation of metros has been carried out in cities like Jaipur and Chennai now.  All the cities with metro rails have shown a positive impact in terms of real estate along the metro corridors.

While retail and commercial areas along the metros corridors benefit directly through ease of access, the impact on residential areas is dual wherein the jobs generated by Metro cause an increase in demand for homes and the reduced commuting costs draw more buyers.

In areas bordering the stations, the noticeable impact is higher on commercial property values than on residential values, and the effect reduces as the distance from the station increases

 Land prices will generally be higher if a land parcel is located within walking distance of the metro, but not directly next to the station. The increase in the land values is reflected in the area served, especially around the stations. There is a substantial increase in demand of retail and office spaces around existing metro stations. Most commercial properties near Metros are result of conversion of individual residential units to apartments, mixed use properties to commercial use and new development on vacant land.

Metro exerts influence in value up to a KM; with maximum influence around 500 meters. In fact the population density of residential areas nearby will tend to increase after the launch of metros due to preference for proximity. Alongside the launch of new projects and developments will also witness a steep rise, a steady price rise is also an accompanying feature.

The relevance and importance of metros can be gauged from the fact that most residential and commercial projects advertise their proximity and the ones which are within walking distance site this as their biggest USP. 

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