This study examines the relationship between infrastructure development and housing market absorption rates across major urban centers in India from 2010 to 2024. Using panel data from eight metropolitan regions, we analyze how various infrastructure investments—including transportation networks, utilities, social infrastructure, and digital connectivity—influence housing inventory absorption. Our findings reveal that transportation infrastructure demonstrates the strongest positive correlation with absorption rates (elasticity of 0.43), followed by utilities infrastructure (0.38). Digital connectivity shows emerging significance in the post-pandemic period. The impact varies substantially across city tiers, with Tier-II cities exhibiting greater absorption elasticity to infrastructure improvements than Tier-I metropolitan areas. We construct an Infrastructure-Absorption Index (IAI) to quantify regional variations and develop a predictive model for housing market performance following infrastructure announcements. The results provide empirical support for sequencing infrastructure and housing development policies, with implications for urban planning, real estate investment, and housing affordability initiatives in rapidly urbanizing economies.

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Impact of Infrastructure Development on Housing Market Absorption in India

  • Dipayan Roy,
  • Pritpal Singh Bhullar

摘要

This study examines the relationship between infrastructure development and housing market absorption rates across major urban centers in India from 2010 to 2024. Using panel data from eight metropolitan regions, we analyze how various infrastructure investments—including transportation networks, utilities, social infrastructure, and digital connectivity—influence housing inventory absorption. Our findings reveal that transportation infrastructure demonstrates the strongest positive correlation with absorption rates (elasticity of 0.43), followed by utilities infrastructure (0.38). Digital connectivity shows emerging significance in the post-pandemic period. The impact varies substantially across city tiers, with Tier-II cities exhibiting greater absorption elasticity to infrastructure improvements than Tier-I metropolitan areas. We construct an Infrastructure-Absorption Index (IAI) to quantify regional variations and develop a predictive model for housing market performance following infrastructure announcements. The results provide empirical support for sequencing infrastructure and housing development policies, with implications for urban planning, real estate investment, and housing affordability initiatives in rapidly urbanizing economies.