Setting up Smart Cities is one of Prime Minister Narendra Modi’s pet projects in India. It has been widely discussed since 2015 and is keenly anticipated by the common man as well as conglomerates. A total of 98 cities have been selected from all the states in the country and are expected to be turned into citizen-friendly, sustainable cities.
The vision
Smart cities are likely to have features like assured power and water supply, sanitation and solid waste management, effective urban mobility, strong IT connectivity, e-governance and other smart solutions in order to offer a good quality of life to residents. Finances to the tune of Rs 980 billion have been approved for the development of these cities as well as the rejuvenation of 500 other cities.
Technology is expected to play a critical part in facilitating good governance and delivery and in mitigating issues currently faced due to poor planning and maintenance. It will also provide environmentally responsible solutions.
The essentials
Smart cities can be one of three types – new cities, existing cities retrofitted to include all amenities or purpose-driven cities centred on core activities. The core components that go into the making of a smart city include infrastructure, power, funds, technology as well as social capital.
Considering that sustainable living and higher quality of life is expected of these smart cities, affordable housing will become much more of a necessity than before. Smart homes that reflect the ideology of these cities and are efficient in environmental conservation will be in demand.
Impact on real estate investment
Needless to say, improvement in infrastructure is always attractive for people keen to invest in real estate. By the same logic, smart cities will offer significant scope for appreciation in property value. Smarter workplaces, improved hospitality solutions, savvy leisure and entertainment options such as shopping areas and so on will all contribute to changing the face of the real estate sector in India.
When it comes to residential properties, here are a few aspects to consider:
- When it comes to investing in smart cities, think long-term. Investing with short-term timelines in mind may not yield satisfactory returns since the implementation of these features will take some time.
- In case of existing cities that will be retrofitted, such as Chennai, Coimbatore, Vishakhapatnam and Kochi, this will essentially translate into much better infrastructure which could possibly perk up dull real estate
- Considering that commute will improve by leaps and bounds, overcrowding in certain parts of these cities will get resolved automatically. This will increase development of properties in peripheries of existing cities.
- The concept of smart cities necessitates better social infrastructure. Healthcare institutions as well as schools and colleges will be required to come up in these locations.
- With enhanced citizen participation in civic matters, one can expect confidence in real estate investment to grow as opposed to current dissatisfaction vis-à-vis amenities and infrastructure.
Smart cities are no doubt an exciting prospect for any nation. Assuming there will be reasonably good implementation, Indian real estate has an interesting future ahead.