The Indian real estate sector is witnessing rapid growth on account of Tier I and II cities which are contributing handsomely to the same. Growth and development of the real estate were previously limited only to metropolitan cities and possibly a few Tier-I cities. However, Tier-II and III cities are now contributing to overall real estate growth in the country. With lower costs of living and high demand for housing, real estate markets are flourishing in these cities. Residents of these cities are also better placed with regard to buying homes due to higher savings garnered from lower costs of living.
Properties in tier-II and III cities have lower ticket sizes as compared to bigger cities and land prices are also on the lower side along with labor and construction costs. The costs of real estate development are lower in these cities as compared to tier-I and metro cities and hence the prices are also lower. For example, apartments with 3 BHK configurations up to 1500 sq. ft. can be purchased for anything between Rs. 30-50 lakhs across cities like Bhopal and Ahmedabad. The same configuration and type of property will be priced upwards of Rs. 70-80 lakhs in major cities like Bangalore and Gurgaon.
Tier-II and III cities are also included in major initiatives like the Atal Mission for Rejuvenation and Urban Transformation and Smart Cities and this has contributed to rapid infrastructural growth which is boosting real estate markets in turn. More corporate companies are setting up shop in tier-I, II, and III cities, and towns. This is contributing to higher employment and more demand for housing in turn. Buying and selling real estate is easier in these cities and hence the sector is doing well across tier-I and II cities. There are minimal compromises as well with regard to delivery and quality of construction due to lower operating costs overall. This is another USP when it comes to buying a property in these cities.
People find it safer to buy properties in tier-II cities such as Bhopal, Ahmedabad, Coimbatore, Chandigarh, Kochi, and Indore among other examples. The advent of RERA has also increased overall accountability and transparency in the sector, thereby encouraging several first-time buyers in these cities to invest in properties of their choice. The thrust on affordable housing by the Government and the Housing for All by 2022 mission are other factors contributing towards the growth of real estate markets in smaller cities and towns across India.