Government upcoming airport development plans in smaller cities, is it profitable to invest in such properties?

By Abhay Shah, Realty Quarter

Nothing breaks the perspective of a new town as you move into it, whether you’re flying domestically or internationally. From the sky, Andheri streetlights are glowing like gold from Mumbai. Jackson Heights’ grid design just outside La Guardia in New York provides a feeling of its geography. And the region around the Narita of Tokyo is so green; you’re going to ask where the famous Japanese technology moved.

In cities as far as Shirdi in Maharashtra, Hisar in Haryana, and Durgapur in the West Bengal, the government plans to open up near to 100 new airports across the nation. In the hope of creating the most of the place, many investors are contemplating purchasing up land close to those airports. Commercial developers hope that eventually, the restaurants and conference halls they construct could be lucrative. And after airports begin operations, economies will get a boost; also many landowners hope their plots will become more valuable.

Should you plan to invest in areas around the next airport? Analysts in their opinion are divided. A house close to the airport is ideal in large towns for a frequent flyer but dreadful for everyone who lives along the way. The factors change in smaller towns. Your investment could drop rather than rise according to the city, the local economy and the ultimate air traffic motion.

It’s just a radar blip, states Anuj Puri, chairman of Anarock Property Consultants’. “It’s relatively well-known that an increase in cost will take place, but our understanding is that the cost increase is only temporary after the announcement.”

It is commercial real estate that provides the most hope when property values are appreciated – all airlines will ultimately need service quarters, luggage holds, a hotel, and related businesses. On the other side, rates for luxury housing projects are plummeting. Analysts claim that the advent of any new public transport infrastructure will result in traffic and noise pollution, which will prevent house buyers from luxury. “We’ve noticed that affordable housing is the only real estate industry that is shooting up in the area after an airport announcement,” states Puri.

What if the airport project gets stalled?

The government scheme not only covers new small city airports projects but also plans to revive stagnant airport projects, in particular in Greenfield projects, where the hurdle (literally a Greenfield) is not much in competition. After ten years of snail-paced development, Kannur airport was developed in Kerala in 2019 and was operational in this category. Land prices in the area skyrocketed. A one-acre land, which in 2013 cost Rs 5 lakh, is now hunting approximately Rs 1 crore. However, a hike in prices is also stalled when the development of the airport is stalled. Rajan Bandelkar, NAREDCO Maharashtra President, said that “higher yields are directly linked to the development progress of the airport”. Consider the slow speed of the Navi Mumbai international airport. In 2008, prices of land rose, but in the decade since, they have settled to previous levels.