Infrastructure is the most important stimulus for real estate demand and the potential for the property to appreciate. Without decent road networks and essential services, the area will be overlooked.
The forms of infrastructure
There are many different types of infrastructure: road developments that connect a region to a sub-region, civic infrastructure including water and electricity supplies, public gardens. There is also social infrastructure such as colleges, schools, and healthcare. When travel time to essential services has reduced, the standard of living of those living in the area is increased.
Key infrastructure needs to be in place before or at the same time real estate is being developed. In many cities, there is a retrospective attempt to put the necessary systems in place building flyovers, or widening roads which cause great disruption to traffic flow.
Properties in areas that have poor infrastructure networks tend to have lower property rates. The developers realize that with poor connections they can only sell the property for a fraction of other areas.
Buying for the future
If an emerging area has made reasonable assurances that infrastructure expenditure will occur in the future, it may be an interesting investment opportunity. If on the other hand, the buyer is solely looking to produce rental income, infrastructure is a key buying decision. Those looking for rental option want the convenience of living and they would be willing to postpone buying a house if they can rent in a well-serviced location.
When buying a home, a checklist is necessary with proximity to road and rail, schools, hospitals, shopping outlets, and water supply. Check the council plans for any planned expenditure on infrastructure in the area.