While real estate market in metro cities has been seeing a steady rise but, the actual growth drivers in the next few years, according to industry insiders will be Tier II cities. Hence, initiatives such as Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation are likely to improve the living standards and infrastructure of Tier II and Tier III cities.
Experts of real estate such as Pankaj Bajaj, MD Eldeco and President of CREDAI -NCR believes that tier-2 is the new affordable and developing market for home buyers. He says:
“The tier 2 story is the real story. It’s not frothy, there’s no bubble, and the absorption is not down, so absorption numbers are in fact higher than last year. I understand that there is some kind of consolidation. I am selling better in tier 2 this year than the last year. I think that more relevant questions are to be asked. It’s not that the market has evaporated. There is an inherent demand in these markets. The price has not risen, that’s the reason why the absorption continues to be there; that here was some frothy demand in tier 1 markets; that was never there in tier 2. So it’s a great time to buy.
Overall, we are expecting growth spurts to be seen in Jaipur, Ahmedabad, Chandigarh, Bhubaneshwar, Coimbatore, Indore, Nagpur, Vadodara and Visakhapatnam.
Hence the coming few years should be exciting ones in terms of real estate development for Tier II cities.
Major players are now going to re-align their positions vis-a-vis unexplored territories. There is now a very clear realization that it is extremely difficult to become a genuine Pan India player in every geography and real estate segment. Moreover, developers today have woken up to the fact that there is only limited capital available to real estate players today – capital that is earmarked for residential projects, construction funding against achieved leases and signed contracts, or for cities displaying sufficient demand even in subdued market conditions.