How Revival Of SEZs Will Push Real Estate Growth

With the country's exports seeing a fall in the recent past, the government is planning to give its special economic zones (SEZs) a much-needed growth push. The Centre is working on a proposal, under which it may reduce the minimum alternate tax (MAT) SEZs pay, along with other tariffs. This might come as good news for real estate and construction sectors which will see new opportunities and avenues.

A look at how this will help real estate grow:

SEZs are generally developed far away from a city, while employing people in huge numbers. This, in turn, triggers demand for residences close by. This is the reason why SEZs in Bengaluru and Chennai have helped residential demand in many area grow in a big way. Being avenues of employment, property prices in such areas also see substantial growth. Most of the homes that are built around SEZs are 2 BHK homes. This is due to the higher spending capabilities of the executives working there. 

It is also profitable for developers to invest in residential property near SEZs. While homes in these areas have good demand, they also provide easy availability of land banks. 

With large constructions close by, homes around an SEZ have good livability index. The government focuses on developing road connectivity and other infrastructure around SEZs. Since there is concentration of huge workforce, other utilities also catch up much before such constructions are complete. 

Most of all, nothing spurs growth of property values in an area than a thriving businesses environment. The better the businesses perform, the higher will be the property value of the homes around them.