The announcement of Pres. Duterte on his infrastructure program is a well received development. Described as the “golden age of infrastructures”, the Duterte administration has rolled out its infrastructure projects – from new roads, airports and railways.
Based on studies, the value of properties tend to increase in the adjoining areas with the infrastructure projects. There have been instances that the price increases go as high as 50-70%, from the announcement of the infrastructure until the operational phase.
Infrastructures changes within the vicinity of the property add an established livability quotient for the public. Factors like new roads, highways, malls, schools and hospitals, all contribute in the appreciation. Infrastructure that links localities to the neighboring are as also influence the value of the property.
There are other factors that may have a negative bearing for the property owners affected by the infrastructures. Government usually pricing the land using BIR Zonal Value or worse the Assessment Value that is shown in the tax declarations. Proper authorities should look into it for proper compensation to the landowners.
Investors should take a good look at the property appreciation involved before putting an investment along the major infrastructure projects. Proper evaluation is needed in establishing the potential of the vicinity.
Some factors to consider before investing in properties around an infrastructure are the following:
- The time frame and the phasing of the implementation
- value drivers in terms of employment generation, increase in trade and business and others
- The larger development plan and the position of the property on its land use plan
- In general, the investor should develop an study focusing on the projections of supply and demand in the area and financial feasibility in order to evaluate if it is feasible and justified.
Feasibility study is the primary activity a prudent investor should do before infusing investment in properties along the infrastructure’s area.