The growth and development in the real estate sector is mainly attributed to the metropolitan and tier-I cities. But, the actual growth drivers in the next few years, according to industry insiders will be Tier II cities. However, there has been a noticeable rise in the participation of the tier-II and tier-III cities in the recent past.

 

Now markets in Tier-II cities: Jaipur, Indore, Chandigarh, Coimbatore and Kochi are seeing a rise in demand.

The trend is welcomed by the market, as smaller cities continue to demonstrate a robust growth in terms of business activities. Thanks to the strong levels of domestic demand and low cost of living, residents of these cities are well placed to save more and buy homes.

 

The Fundamentals

 

Properties in the tier-II and tier-III cities come with a significantly lower base and therefore the ticket sizes are much lower as compared to the large cities. Land prices are much lower and so does the cost of construction and labour. This is why, the overall cost of developing housing projects in these cities is significantly lesser than the tier-I metropolitan cities.

 

Hence, initiatives such as Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation are likely to improve the living standards and infrastructure of Tier II and Tier III cities. Developments like these definitely spell well for their respective housing and real estate markets.

 

Homebuyers’ Perspective

 

With the tier-II and tier-III catching up pace in terms of economic development, more and more corporate houses are setting up their campuses in these towns. That means the young and talented workforce, who mostly migrate to large metro cities in search of employment, would be retained by these cities and that would want to buy homes as early as possible.

 

Certainly, given the low ticket sizes, it makes sense to buy real estate in these cities. They are easy to buy and easy to resale also. There is no compromise in terms of construction quality and project delivery

 

It is safe to book a home in tier-II cities such as Ahmedabad, Bhopal, Chandigarh, Coimbatore, Indore and Kochi.

 

Hence the coming few years should be exciting ones in terms of real estate development for Tier II cities.