It feels like a week has passed since Manoj came to Kolkata to join his office at Salt Lake, Sector 5.
But that is not true.
It was almost a decade ago.
Today, when he looks back, he is surprised by how much the city has changed.
Massive urbanisation, demographic changes have completely expanded the city to a much larger entity.
The city is full of life, and it is growing.
Various catalysts are helping the city to grow, and the contours of Kolkata are getting devoured by the city proper.
Manoj, an architect by profession, is often fascinated by this rapid transformation.
He knows firsthand how these changes are transforming the real estate scenario in Kolkata.
Let us discuss how urbanisation and demographic changes transform a city’s property market and how they affect homebuyers.
Let’s share some of Manoj’s perspectives.
Keep reading.
Urbanisation and Its Impact
The massive migration of individuals from rural to urban regions, driven by socioeconomic factors, has had a huge impact on the real estate industry. Rapid urbanisation has occurred throughout time, and the urban population is likely to grow.
Let’s consider Kolkata. Kolkata has been expanding, and erstwhile semi-urban and semi-rural areas are increasingly being absorbed into the city. There is a huge migration of people from the rural areas, faraway towns such as Durgapur or Siliguri, for better opportunities and a superior quality of life.
Urbanisation drives real estate development in more ways than one.
Let’s delve into some of them.
Infrastructure development
Urbanisation increases the demand for better roads, water and sewage systems, public utilities, and transportation. Social amenities, including schools, hospitals, and shopping malls, are also in demand. They raise the demand for properties and propel real estate development.
An upcoming infrastructure project, such as a Metro network, can also steer extensive urban expansion. This is happening in Kolkata right now, as the expanding Metro network is driving real estate development in nearby places along the Metro lines.
Urbanisation and infrastructure development are interlinked. Well-developed urban infrastructure attracts more businesses. This leads to increased population growth as individuals migrate and invest in the region.
Decreased land availability
Urbanisation fuels regional real estate growth, a crucial component driving city expansion.
As more people move to cities, the need for housing grows.
Furthermore, land is necessary for residential, commercial, and industrial projects. This leads to the development of cities, with areas surrounding them emerging as new real estate hotspots.
Higher employment opportunities
There is a link between urbanisation, employment, economic conditions, and real estate movements in a given location.
When the economy grows, firms expand, new job opportunities emerge, and incomes rise. As more people travel to cities in search of jobs, the demand for housing rises.
The rise of gated communities
Gated communities are being developed more quickly in several places.
This is mostly driven by the changing requirements of the population.
People are now more interested in living a modern lifestyle with access to high-end amenities such as a clubhouse, swimming pool, gymnasium, entertainment, and recreational spaces within the housing complex.
Real estate developers include all of these amenities in their projects to meet the homebuyers’ demand.
Escalation in property values
With the rise in housing needs, the demand for residential properties rises. When the demand surpasses the supply of properties in an area, the prices increase.
Central Business Districts (CBDs) in big cities, comprising a cluster of commercial, retail, and business centres, are areas with maximum urban density. These are desirable places that stimulate property demand, resulting in high prices.
Demographic Changes and Real Estate
Demographic shifts, which relate to the age, income levels, education, and occupation of the population, are major elements influencing real estate development.
Let us analyze the many demographic aspects influencing the real estate market.
Age
The age of the people living in any location has a significant impact on their housing preferences.
Different age groups have distinct space requirements, which influence property demand.
For example, young individuals and working professionals are most likely to relocate to cities in search of better prospects.
They are also very interested in living in gated communities.
Income level
People’s purchasing power impacts property preferences and locales
Buying a home is a major financial decision for many people as it involves hefty expenses.
Individuals with more purchasing power prefer to invest more in luxury real estate. Lower-income homebuyers, on the other hand, seek out affordable housing options.
Education
Education is also an important aspect that influences the demand for certain types of houses and location preferences.
Individuals with a high level of education want to invest in high-end neighborhoods near prestigious educational institutions. Similar preferences develop for communities with a lively culture and recreational amenities.
Lifestyle shifts & cultural factors
Cultural traditions, changing lifestyles, and household structures — all influence real estate trends in a region.
Let’s look at it in some detail.
Kolkata offers far better lifestyle options — glitzy shopping malls, a plethora of entertainment centres, better educational institutions, and superior healthcare facilities. This is encouraging the movement of white-collar employees from rural areas to Kolkata and its surroundings.
The Wrap Up
Several factors influence a region’s real estate landscape, the most prominent of which are urbanization and demographic shifts. Understanding these characteristics and their impact on the real estate market will help a homebuyer buy the right property with a better return on investment.
