Real Estate in 2 Tier Cities

Increasing Demand For Real Estate In 2 Tier Cities

Posted on January 9, 2019 under Real Estate by Abad Builders

The action in real estate industry is now slowly shifting to smaller cities thus taking off the pressure from metropolitan cities like Chennai, Bangalore and Kolkata. The scarcity of resources, unaffordable property prices, shortage in natural resources and high cost of living are forcing developers and investors to focus on Tier II cities like Kochi, Vadodara, Jamshedpur and Coimbatore.

The major factors driving real estate growth in Tier II Cities are:

  •    With India’s urban population increasing, demand for housing and retail properties is also increasing owing to high disposable incomes and more nuclear families. For e.g. Villas in Kochi has become an extremely popular housing option owing to the high luxury amenities and proximity to industrial hubs.
  •  Cities like Coimbatore, Kochi, Vadodara and Surat have made huge progress in the industrial sector. They have become the hub of e-commerce owing due to availability of cheap skilled labor and lower cost overheads.
  •    Affordable land and labor is available in these smaller cities. Lower land prices leads to affordable homes and residential units. For e.g. flats in Kochi and Coimbatore have been hot selling and are seen as a major investment option within the buying capacity of a nuclear family.
  •  Government policies and physical infrastructures like metro, airports and express highways are rapidly fueling the growth of smaller cities. With more people migrating to smaller cities for work, the demand for housing and office spaces is increasing.

The future of Indian real estate sector lies in Tier II cities, especially after the introduction of Mission Housing for All by the Central Government. This mission helps smaller cities to expand closer to metro cities thereby encouraging planned construction and development. However the key to such a progress is provision of state of art infrastructural amenities and better planned development to attract a prospective buyer.


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