August 25


Impact of smart cities on the Indian real estate industry

The Indian cities are growing through a significant transformation these days as the growing population is migrating to the urban cities searching for job opportunities. The government designed the intelligent city concept to improve the cities’ living conditions and make Indian cities high-tech cities. The smart city includes CCTV cameras being installed at various places and also has got wifi connectivity. Also, the development of the infrastructure in the city is given importance like good quality roads, 24X7 water supply & electric supply, and the construction of Metro projects. Thus in India, 100 cities have been identified as smart cities wherein the transformation would be done. There are multiple sister cities included in the smart city plan, like Thane, Mira-Bhayandar, Kalyan-dombivali, Pimpri-Chinchwad, Greater Noida Gurgaon, Navi Mumbai. etc. The smart city development plan was undertaken to make the quality of living beautifully in the cities. Due to growing urbanization and migration, there is a need for the developments of the cities to be taken to the next level, and the development should be done according to the rising population of the cities.

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The impact is very deep on the real estate and the home loans sector due to the development of the cities into smart cities. When the living conditions and the facilities improve in the city, the demand for the real estate sector grows as people prefer to stay in such localities convenient for the stay. The prices of the localities also rise, thus making it a convenient place to stay. Also, the companies like tech firms & IT companies prefer to invest in smart tech city hubs; thus, the availability of jobs also increases. Where-ever there is high business activity and rising upwardly middle-class population amongst the salaried class. The rising prices in the cities lead to higher demand for home loans. Also, the commercial activity in such places as smart cities increases with the development of malls, cinemas, retail showrooms.ETC. The demand for housing in newly developed areas is high as compared to the old towns as the prices in the newly developing localities are low. Also, there is more enormous scope for infrastructure development in the city. The rising urbanization leads to the higher development of the cities, and also the demand for home finance also increases. 

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Impact on the real estate industry due to smart cities:

  • Increased relocation of people:

The relocation in the cities increases the demand for housing in the cities. The rising population leads to rising congestions, and thus the need for high-rise apartments increases. Wherever the development and migration are high, the FSI for the real estate projects increases and the high-rise buildings are constructed mainly in numbers. Thus the higher migration has a significant impact on real estate, and hence the demand for real estate rises. Also, the home buyer’s preference is more towards the developed localities and good infrastructure. 

  • Increased demand for the commercial estate:
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The development of the intelligent city leads to the development of commercial zones like malls, theaters, retail showrooms, restaurants & café’s Etc. A rise in opportunities in the towns and with high disposable income leads to commercial development. Thus the commercial development adds value to the projects, and thus the prices of the real estate rise in the commercial zones, and thus, the demand also increases. 

  • Smart cities lead to high potential home loans market:

Wherever the demand for housing is high, the need for home loans increases as many people cannot buy the houses on a full down payment basis. Thus the demand for home loans is high amongst the developing zones. Also, in rapidly developing towns, the chances of illegal encroachment or illegal possession of land are meager. Thus the legal formalities are straightforward. Thus getting loans approved is easy. 

  • Improved quality of living:
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The improvement in the living conditions occurs as good quality infrastructure is the primary focus in intelligent cities. Thus the better living conditions and development provide impetus to the properties in those localities.


Hence the development of intelligent cities leads to massive growth, and the demand for housing increases and infrastructure development becomes rapid. Also, the need for the real estate sector is high as the livable conditions increase the demand for housing. Also, the loan disbursement increases in developed intelligent cities, making it a larger market for the home finance industry. 

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