How Infrastructure Development is Boosting Land Demand in India

Vertical development in real estate is propelling the property market in India. Similarly, for land infrastructure, the expansive development across the country catapults land prices astronomically.

We see a sustained price appreciation of surrounding land after the announcement of, say, an airport. However, the growth of land infrastructure goes beyond the obvious. Infrastructure developments in India, such as airports, highways, industrial corridors, etc., are enriching the local economies. It is improving people’s purchasing power and creating an organic demand for investment-friendly assets, prominent among which is land.

Impact of the Infrastructure Sector

Big-ticket development initiatives have positively impacted the prospects of land infrastructure in India. Some have had a transformative effect, like the Mumbai Trans Harbour Link (MTHL). The 21.8 km sea bridge reduced the Mumbai-Navi Mumbai travel distance to 20 minutes, sharply increasing the land prices in places like Panvel, Ulwe and Kharghar. Similar land appreciation instances are observed around infrastructure projects like the Dwarka Expressway in NCR and the Regional Ring Road in Hyderabad.

These land price appreciations are not limited to urban pockets alone. A few years ago, Bihta, a small town 40 km west of Patna, experienced a sudden real estate boom. Its land prices ranged at around ₹20,000 per cottah back in 2008. By 2018, prices increased to ₹10 lakh. The reason for this astronomical growth? The establishment of a national electronics and IT institute, an ESIC hospital, a Hindustan Petroleum office, IIT-Patna and several residential townships in and around Bihta.