The development in these places is taking place in urban-centric ways to attract young buyers and renters yearning for a better lifestyle.
The Tier-II cities tale resurged after a long period when interest in real estate investment was concentrated mainly in the larger cities. The rejuvenation is taking place as many of these cities are witnessing increased economic activity and infrastructure development, reducing outward migration to metros; this is a positive trend that will result in a more equally distributed real estate market, easing pressure on larger cities.
The development in these places is taking place in urban-centric ways to attract young buyers and renters yearning for a better lifestyle – a metro lifestyle. These resource-rich cities have remained virtually untouched for a long time as the country’s big developers flocked only to the metro cities. But, the pandemic has prompted real estate titans to rethink their plans and shift their focus away from metros.
By 2030, India would have 104 Tier II cities and 155 Tier I cities. The figure alone foreshadows future Tier-II city development. Finally, improved economic growth, infrastructural development, and the benefits of lower real estate prices and a reduced cost of living are all driving up residential demand in these places.
People would want to have all of the modern conveniences in one location, particularly in the aftermath of COVID-19, such as upscale markets, colleges, hospitals, and entertainment venues. Major developers are already coming to these ‘prime’ cities from all across the country. The present housing market favours features that meet health and safety issues, and this is addressed by reputable developers, which provide inhabitants with a controlled living environment.
Cost-effective housing, a dearth of well-organized living options, and the migration of working professionals, among other things, are reigniting demand in places such as Chandigarh and Zirakpur. With interest rates on home loans at historic lows and government incentives for home purchasers, a surge in demand seems inevitable. Furthermore, under the present administration, many of these cities are undergoing significant infrastructure deployment.
Indeed, supply and demand are frequently inversely proportional; not all tier 2 and tier 3 cities are performing equally well. To put it another way, cities that are doing well economically would also attract more migrants who will require rental homes. Both investors and end-users will have a wide range of options from which to choose, allowing them to fine-tune their final choice based on the location, amenities, and ticket sizes. End-users can purchase properties in their home cities – or, in the case of NRIs, in their cities of origin.
Premium home projects in Tier-II cities provide nicely spaced and efficient larger apartments. Beautifully constructed independent floors in Zirakpur’s PR 7 Airport Road provide near proximity to all major necessities and projected accessibility through 200 feet wide road. People are investing in properties along PR7 Airport Road near Zirakpur because of the possibility of large profits and that these properties provide easy commuting to the surrounding locations. NRIs and Punjab, Haryana, Jammu, and Himachal residents are investing in the newly constructed route that connects Chandigarh, Zirakpur, Mohali, and, in time, Panchkula.
The availability of properties in Zirakpur near Airport Road has offered NRIs the opportunity to expect significant returns on their investment now that Chandigarh is on the map for them. It also provides good access to important locations, proximity to tourist sites, and high quality of life, making it a popular spot to buy/invest.
Furthermore, property investment is secure since consumers will earn returns on their capital, whether through rental or capital appreciation; short-term capital appreciation is expected to range between 10% and 12%. In fact, because of the expected strong footfall from the mid-segment to the high-end, numerous foreign brands in commercial enterprises are making their presence felt in the area. As a result, real estate value in such neighbourhoods in Tier-II cities will skyrocket as more developers and investors are flocking to these burgeoning metropolises.
(By LC Mittal, Director, Motia Group)