Register for features like favorites, compare, comprehensive advice, consultation and more.Register
The outbreak of COVID-19 and the lockdown which followed it has brought about significant changes in various sectors of the economy. The real estate sector is no exception either and is witnessing a number of major changes. One of the most important among them is the rise in demand for residential units in the Tier-2 and tier 3 cities.
So far, the Tier-1 cities, or the top 7 cities of India, account for about 70% sales in the real estate industry. However, this is expected to change shortly. The prime reason behind the high demand for homes in these cities was the large influx of migrants caused by the employment prospects. However, many professionals have lost their jobs or are expecting to lose them soon as a result of the pandemic. This is triggering a phase of reverse migration in which these people are going back to their hometowns.
The reverse migration is going to cause a surge in demand for homes in the Tier 2 and tier 3 cities, which would greatly change the real estate market landscape in India. A majority of the homebuyers eyeing these cities are end-users, which implies that they are planning to buy these homes because they need them for personal use. The real estate sectors in cities such as Lucknow, Coimbatore, Jaipur, Chandigarh, Ahmedabad, Kochi and Indore are particularly expected to benefit from this.
Home sales in the above mentioned cities were already starting to witness a gradual rise. This is because the lifestyle in most of the metros is quite expensive. Tier-2 & 3 cities, on the other hand, provide economical cost of living, along with lower property rates as the demand for homes is still relatively lower than Tier-1 cities. Now, at a time when many people are facing a financial crisis, affordable living has become a burning necessity for them. While in the past, metros used to offer far better infrastructure than the Tier-2 cities, the latter have undergone considerable development and now offer similar features.
The trend of reverse migration is also to be seen among NRIs as many of them have been returning to India amidst a situation of uncertainty. Investors are also expected to start purchasing homes in the Tier-2 and 3 cities. This is because not everyone migrating to these cities can afford to buy a home right away due to ongoing financial struggles and would seek rental homes. All these would give a rise to construction activities in these cities while maintaining hygiene & safety as top priorities.
Stay updated with everything real estate!
Subscribe to our news letter