The appeal of India’s Tier 2 and Tier 3 cities is significantly influencing the real estate sector, spanning from tranquil areas to thriving urban centers. Factors such as a burgeoning population, swift urbanization, and enhanced infrastructure are drawing not only new residents but also developers keen to explore the vast opportunities these cities present.
Economic elements, including government funding for infrastructure projects and comparatively lower land prices than those in metropolitan areas, are fueling the demand for real estate development. These demographic shifts are fostering a consistent need for residential properties in these expanding urban locales. Previously eclipsed by their metropolitan counterparts, these cities are now experiencing a notable increase in residential real estate activities, propelled by various trends that are transforming the real estate market.
Urban infrastructure development is a key trend driving the real estate sector in Tier 2 and 3 cities. Government initiatives such as Smart City Mission, PMAY, and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) are playing a significant role, with major investments in roads, highways, public transportation, and even regional airports. These improvements enhance connectivity within these cities and link them to larger urban centers, making them far more accessible and appealing to prospective residents. ANAROCK’s recent Consumer Sentiment Survey reveals that 26% of property investors are now favoring Tier 2 and Tier 3 cities, highlighting a shift in real estate investment trends.
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Piyush Kansal, Executive Director, Royale Estate Group, says, “Many Tier 2 and 3 cities are experiencing a surge in urban development, supported by government and private sector initiatives to enhance connectivity. This includes the construction of new highways, expanded airport facilities, and the establishment of business hubs and industrial zones. With such developments, we expect a continuous growth momentum in the sector, boosting local economies and making these cities more accessible and livable.”
Moreover, as the buyers’ lifestyle changes, there’s a shift in consumer preferences towards luxury amenities and lifestyle offerings.
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