Abstract/Summary

A recent boost in spending on the public infrastructure across India raises the question: how does the property sector react to massive infrastructure construction? The answer have significant policy relevance. This paper uses panel data across seven major Indian cities, spanning seven years from 2008 to 2014, to ascertain the short-run and long-run impacts of infrastructure attributes on property values and rents. The study finds that increases in the percentage of public infrastructure spending lead to a positive effect on the property capitalisation rate in India, but have a negative impact on the rental market in the short term.