Real Estate thrives in Tier-II
After a long time in which interest in real estate investment was concentrated mainly in large cities, the history of second-tier cities returned.
The renaissance is happening because many of these cities are experiencing an increase in economic activity and infrastructure development, reducing their emigration to the metropolises. This is a positive trend that will lead to a more even distribution of the real estate market and reduce pressure on large cities.
The development of these places is proceeding in an urban manner to attract young buyers and tenants who desire a better lifestyle-a metropolitan lifestyle.
These resource-rich cities have remained largely intact for a long time because the country’s large developers only flock to the big cities. But the pandemic has prompted real estate giants to reconsider their plans and divert their attention away from metropolitan areas.
By 2030, India will have 104 second-tier cities and 155 first-tier cities. This number in itself indicates the development of second-tier cities in the future. Finally, improved economic growth, infrastructure development, and benefits from falling property prices and lower living costs have driven demand for housing in these locations.
People would like to have all modern amenities in one place, especially in the aftermath of COVID-19, such as high-end markets, universities, hospitals, and entertainment facilities.
Major developers are already coming to these “major” cities from across the country. Cost-effective housing, the lack of tidy living options, and the relocation of working professionals are rekindling demand in places like Chandigarh and Zirakpur. With historically low mortgage rates and government incentives for home buyers, we believe a surge in demand is inevitable.
Supply and demand are often inversely proportional; not all second-and third-tier cities perform equally. In other words, cities with good economic conditions will also attract more immigrants who need to rent outhouses. As a result, both investors and end-users will have a variety of options to choose from.
In addition, real estate investment is safe because consumers will obtain capital returns through rent or capital appreciation; Short-term capital appreciation is expected to be between 10% and 12%.
In fact, many foreign brands in commercial companies are feeling their presence in the region due to the expected strong flow of passengers from the mid-range to the high-end. Therefore, as more and more developers and investors flock to these emerging metropolises, the real estate value of such blocks in second-tier cities will skyrocket.