The tier-2 cities of Nagpur, Coimbatore, Bhubaneshwar, Indore and Jaipur are emerging as real estate growth engines, real estate web portal Magicbricks has said in its latest report named, India’s Tier 2 cities: Emerging Real Estate Growth Engines.
According to the report, these five tier-2 cities accounted for the highest growth in residential as well as rental demand on a yearly basis.
The highest year-on-year (y-o-y) residential demand was observed in Nagpur (49 per cent), followed by Coimbatore (27 per cent), and Bhubaneswar (12 per cent). The highest y-o-y rental demand was observed in Nagpur (84 per cent), Coimbatore (30 per cent), and Indore (6 per cent).
Says Sudhir Pai, CEO, Magicbricks: “Covid-19 was a watershed moment for the real estate industry, especially in the tier-2 cities, which have now emerged as real estate growth engines. Additionally, government initiatives like AMRUT and the Smart Cities Mission have helped these cities evolve into new economic hubs. With an uptick in economic activity and employment opportunities, we expect the tier-2 cities to gain more momentum as prime residential markets in the coming months.”
The report further observes that Indian multinational companies (MNCs), such as TCS and Infosys are now present in 80 per cent of these cities, while foreign MNCs, such as IBM are present in almost 60 per cent of these cities, with further plans of expansion in the pipeline.
City-Wise Detailing
In Bhubaneswar, the residential demand increased 5 per cent quarter-on-quarter (q-o-q), and 12 per cent y-o-y, while the rental demand declined 15 per cent q-o-q. About 37.7 per cent of the customers preferred homes in the 1,000-1,500 sq. ft. range.
Residential demand in Coimbatore grew 12 per cent q-o-q and 27 per cent y-o-y, while rental demand increased 11 per cent q-o-q and 30 per cent y-o-y. According to the report, 43 per cent of homebuyers preferred 2BHK configuration, while 39 per cent of homebuyers were searching for properties priced between Rs 25 lakh and Rs 50 lakh. About 23 per cent were looking for homes in the Rs. 50-75 lakh range.
In Jaipur, the aggregate demand for residential properties increased 5 per cent y-o-y, while the rental demand grew 17 per cent y-o-y. The demand for 3BHK configurations constituted 57 per cent of the total demand for new houses, and majority (35 per cent) of the homebuyers preferred units in the 1,000-1,500 sq. ft. bracket.
The residential demand in Nagpur grew 25 per cent q-o-q and 49 per cent y-o-y, while the rental demand increased 84 per cent y-o-y. The demand for 2BHKs was 44 per cent of the total residential demand, while 45 per cent of the homebuyers preferred properties in the size bracket of 1,000-1,500 sq. ft.
The residential demand in Indore increased 12 per cent q-o-q and 2 per cent y-o-y, while the rental demand increased 6 per cent y-o-y. The report observed that 42.5 per cent of homebuyers preferred 3BHK units and 22 per cent of homebuyers were keen to opt for units in the size range of 1,000-1,500 sq. ft.
