Soon, Tier II Cities Could Outshine The Rest
There is one major concern that needs to be noted at present in the Indian property market. It is the pace at which barren land is being transformed in metropolitan cities. For every product, there is a certain life cycle, where the stage of decline has also set in. The once-popular investment destinations are nearing saturation.This scenario dictates shifting focus towards areas that are next in line, i.e. tier II cities.
Almost all the unused space in tier I cities are being utilised that does not allow for further customisation. This strikingly highlights the importance of land usage in other tier II cities. Central government's initiative – AMRUT and smart cities mission can help at an extent to develop the tier II property markets.
Development of new unused land allows better innovation and advancement for domestic developers that marks better construction and services. These developers also offer new schemes over the old, hence the new ones offer scope for improvement on a broader scale.
In India, tier II cities are prone to grow much better. Tier II cities are the key for smart futuristic development. At present, we are progressing with immense infrastructure upgradation plans in India that are certain to support the expansion of tier II areas. Pricing is the supreme factor for attracting homebuyers and investors on a larger scale.
For both investors and developers, tier II cities emerge as the realty hotspots, where most of the housing projects are comparatively cheaper than the tier I cities. Let's take an example – property prices in key tier I cities (i.e. Delhi-NCR, Mumbai, Chennai, Kolkata) are anywhere from Rs 4,000 per sq. ft. However, the promising tier II cities (Surat, Nagpur, Vadodara, Chandigarh, etc.), offer properties ranging from Rs 2,500-Rs 3,500 per sq. ft.
Following are the top five tier II cities in India, which are currently seen playing a key role in the country's development and advancement for better transformation.
This city in Gujarat is one of the most promising tier II city that has sound infrastructure. The proposed Mumbai-Ahmedabad bullet train which will have a stop in Surat, four-lane highways between Dakor-Savli, Vadodara-Dabhoi and Surat-Olpad-Bardoli and plan for Rs 90,000-crore Mumbai-Surat tunnel road and construction of modular cargo terminal marks for a better future prospect for realty growth.
This flourishing city of Maharashtra is expecting Nagpur Metro, Nagpur-Secunderabad and Nagpur-Bilaspur high-speed train, 10-lane flyover cum under-bridge in Pardi, multi-modal international hub airport and development of the first IIM in the state. All these wide-ranging projects open better options for developers to build in more housing projects for prospective buyers.
This city of Gujarat is no less than the Surat. The current projects like the six-lane Vadodara-Surat highway, four-lane Vadodara- Mumbai Expressway, development of Statue of Unity and the convention centre in Surat and Vadodara and the IT sector will make the way for reputed developers to come up with lucrative projects that will be beneficial for both investors and consumers.
Indore, Madhya Pradesh
The city will reveal projects like three-corridor metro rail, Indore-Ichhapur Road (SH-27), Indore-Ahmedabad Road (NH-59), non-polluting and multiproduct industrial regions – Kasarwardi, Relwa Khajuri, etc. All these factors are leading for a greater scope for further development of housing projects.
This city or union territory is already famous for its planned structure and way of functioning. From organised water supply to underground network of pipes for disposal of sewerage and 1,400-km city road network makes the city most promising for developers to come up with good housing projects. With the development of New Chandigarh where townships from Omaxe and DLF have made a mark speaks of greater advancement in the realty area.
With the tag of lower price and a promise of appreciation, these tier II cities are prepared to offer good returns for their consumers. There can be two different angles of looking at the property investment in these regions. First is the RoI (return on investment); and the second is lower price. Both the factors will help in generating better demand from consumers/buyers and investors. Another aspect of investing in these regions for investors and end users can be of long-term investment and second-home buying. This can equally trigger the growth momentum for developing tier II cities.
Many big plans lie in store for these cities. With AMRUT offering an overhaul of 500 Indian cities, these cities are poised to become more prominent in the near future. Looking at a buyer's perspective, the property which they will buy today will cost less. This will lead to sudden appreciation of home price which is guaranteed to take place in the next three to four years. Therefore, buyers/investors are certain to gain huge returns, expected to be as high as 50 per cent.
The present status suggests us that the realty stage is well set for the dominance of tier II cities and also destined to become the next big thing for real estate developers and at the same time for potential homebuyers too. With growing infrastructure and continuous housing demand, real estate developers and ready to expand their construction in these regions.