Government is planning close to 100 new airports around the country – in towns as far apart as Shirdi in Maharashtra, Hisar in Haryana and Durgapur in West Bengal. Many investors are considering buying up property near those airports in the hope of making the most of the location. Commercial developers hope the hotels and conference halls they build might eventually be profitable. And economies get a boost after airports start operations, many landowners hope their plots become more valuable.
Whether one should invest in the land near the airports is debatable. Analysts are divided in their opinion. In big cities, a home near the airport is great for a frequent flier, but awful for anyone who lives within the flight path. In smaller towns, the variables change. Depending on the city, the local economy and the eventual air-traffic movement, the investment might sink, rather than soar.
FLIGHT ANNOUNCEMENT
When new airports are announced, the plans are usually met with a lot of fanfare. According to Ashok Mohanani, Chairman of Ekta World, a Mumbai-based real estate developer, there’s hope that comes along with it. In the realty sector, this translates to increased demand and inquiries for projects near the land demarcated for the airport.
It’s a mere blip in the radar, says Anuj Puri, chairman of Anarock Property Consultants. He also says that it is fairly well-known that there will be a price rise, but it has been observed that the price rise is only momentary following the announcement.
When land values do appreciate, it is commercial real estate that offers the most hope – all airports will eventually need service quarters, cargo holds, a hotel, and allied businesses. On the other hand, luxury housing project prices plunge. Analysts say the emergence of any new public transport infrastructure comes with crowd and noise pollution, which deter luxury home buyers.
Puri also adds that it has been observed that affordable housing is the only real estate sector that shoots up after an airport announcement in the vicinity.
LANDING STRIPS
The government scheme covers not only new small-town airports, it also plans to revive stagnated airport projects, especially those in the Greenfield category, where there is not much competing construction posing a hurdle (literally a green field). In Kerala, Kannur airport, developed in this category, became operational in 2019, after 10 years of snail-paced development. Land rates skyrocketed in the vicinity. A one-acre plot, which cost Rs 5 lakh in 2013, now fetches close to Rs 1 crore.
But if airport work is stalled, price-rises are stalled too. Rajan Bandelkar, president of NAREDCO Maharashtra says that higher returns are directly related to the developmental progress of the airport. Think of the Navi Mumbai International Airport’s slow pace. Land prices shot up in 2008. But they’ve settled down to previous levels in the decade since.
TOUR GUIDE
Many of the new airports are planned in regions that show potential for tourism development. Chipi airport, in Maharashtra’s coastal Sindhudurg district, is being developed to get recreational visitors to the otherwise agricultural area. Bandelkar adds that getting an airport will attract more tourists and will increase income from tourism, which will also help in further development of infrastructure. Thus the areas around the airstrip will become more valuable. But tourist hubs and coastal areas might be a surer investment.
According to the experts if a home is being considered as an investment, one must look more at rail and road connectivity than proximity to an airport. Buying property near future airport projects works only if one is looking for long term gains.
Source: Hindustan Times
