Categorized | Real Estate

Tier II Cities, the Next Hubs for Real Estate Investments

There was a time when people avoided investing in the real estate segment of tier II cities. With the increased property prices in the metropolitan cities, tier 2 cities have come up as excellent options. The buyers who invested in the properties in cities like Chandigarh, Lucknow, Bhopal, Indore, Jaipur, Raipur, Patna, among others have witnessed a whopping increase in the property prices, somewhere around 50-70%. Seeing this trend, the buyers are now hitting the jackpot by investing in properties at the right time in these cities, preferably hometowns.

Reasons for increased demands

Rapid urbanization and increased incomes have led the tier II cities to witness higher demands for properties, particularly flats in gated communities and townships. There has been increased penetration of the corporate world in such cities, which have thereby created new employment opportunities, developed social infrastructure, and improved connectivity, which have largely influenced the buy and sale of properties. Increased disposable incomes, individuals pursuing higher education, easy availability of bank loans, improved economic conditions of the people and awareness about current real estate trends have added to the demands of properties in these cities.

Apart from all these reasons, as already discussed, the increased prices of properties in metro cities have led to more price appreciation in these cities. Some of the leading builders and developers have entered an agreement with international builders to introduce new residential as well as commercial properties in some places such as Chandigarh. The upcoming projects in Indore, Coimbatore, Kochi, among others have been successful in attracting more and more buyers.

Lucknow has witnessed the similar trend where the renowned builder named DLF has come up with a new studio apartment project named DLF My Pad. After the success of this project, DLF has also plans to develop other integrated townships like DLF Gardencity, on NH-24 B, Lucknow.

Availability of ultra-modern facilities and excellent specifications within the affordable price range has led more and more buyers to invest in these cities. World class projects available in a price band of Rs. 2,500-4,000 per sq. ft. are indeed a treat for the buyers.

Since the corporate world has largely influenced the lifestyles of the people, studio apartments have started gaining a lot of popularity among the young buyers. Such homes are smart, well-furnished and often do not need much capital investments.

What do market analysts suggest!

The market watchers suggest that urbanization will be visible in almost every tier 2 and 3 city. However, it is very important to enquire about the developer, locality, connectivity and infrastructural developments in that locality. Not to forget the rates of the property and the delivery record of accomplishment of the builder. The buyers can depend on the information provided by the real estate agents and banks.

Is investment in tier II & III cities a wise decision? The experts suggest that investment in tier II cities can be a good deal as the maintenance is not as high as in metro cities. However, the buyers need to make sure that it is a loan free investment because in case the prices of properties do not go up, the interest, which is to be paid to the bank will put a burden on buyer’s pockets.

RashmiAuthor Bio: Rashmi Karan is a writer and illustrator. Her areas of interest are the area and city specific real estate scenario of the Indian cities. Her articles about the real estate offer exhaustive information on the related topics.

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