Introduction
Tier 2 and Tier 3 cities in India are emerging new real estate hotspots for homebuyers and investors, offering affordable housing, modern infrastructure, strong ROI, and better lifestyle opportunities
As India enters a new era of urban transformation, real estate is booming in tier 2 and tier 3 cities. For decades, the top-tier cities like Mumbai, Delhi, Bangalore, etc., have dominated the facet; however, now the shift is moving towards Tier 2 cities in India as these are becoming a hotspot for homebuyers and real-estate investors. From modern infrastructure to digital upgrades, the customers' preferences are evolving with time. Also, the investors are eyeing these cities with immense potential for buying homes to foster better returns on investment in the future.
Whether you are a home buyer or an investor, the potential in these Tier 2 and Tier 3 cities is certainly promising. Explore the key elements below:
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Affordability: One of the most significant factors driving the growth of real estate in the tier 2 and tier 3 city in India revolves around the balance between luxury and affordability it offers. The properties here are designed in accordance to meet the demand of the middle-class segment to the upper class. The investors can opt for premium luxury apartments packed with top-class facilities in an affordable range. Also, the financing options, like home loans and others, are easily accessible in these cities.
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Expansion and Employment Opportunities: The recent initiatives by the government, like Smart Cities, Pradhan-Mantri Awas Yojana (PMAY), and more, have driven enough development of multinational corporations and IT Parks within these cities. Henceforth, for professionals, these cities have enough employment opportunities, and the chances for business expansion are always high.
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Seamless Connectivity: As compared to the hustling cities like Mumbai and Delhi, the Tier 2 and Tier 3 cities offer comfortable accessibility driven by roads and the metro. Smart cities are managed better with flyovers, better traffic management, and a dedicated population. Henceforth, the lifestyle here is less complicated.
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Better Return On Investment: Considering the investment potential, the lower appreciation rates and increasing demand for rental properties make the return on investment way better than other high-end cities.
Also Read: classification in Tier I, II, III, and IV
When it comes to buying a home or investing in a property, it is imperative to consider the parameters that make a city worth investing in or not. From cultural diversities, ongoing developments, and infrastructures, there are several parameters to be considered. Henceforth, in order to eradicate the confusion between the tiers of the city, below illustrated are the following key pointers. Take a look:
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S.No.
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Parameter
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Tier 1
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Tier 2 & 3
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1
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Cost of Living
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Very High
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Low and Affordable
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2
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Employment Opportunities
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High Paying Jobs and Other Employment Offers
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Relatively low employment opportunities due to the emerging growth
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3
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Infrastructure
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Highly Advanced
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Modern and advancing
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4
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Economic Hubs
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Major IT Parks, Corporate Hubs, and Multinational Corporations
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IT Parks, Start-ups, Regional industries
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5
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Major Transport
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Metros and Highways
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Highways and metros are under development
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Many may wonder how many tier 2 cities in India offer better real estate investment opportunities; hence, the solution is mentioned below. Take a look:
1. Indore: Popularly known as the business capital of Madhya Pradesh, Indore is an emerging smart city that is welcoming real estate investment opportunities at a rapid pace. Ranked as the number 1 cleanest city of India, this place has exceptional educational, lifestyle, and healthcare facilities. Likewise, major real estate names are developing their residential and commercial projects.
2. Ahmedabad: Located in Gujarat, Ahmedabad is one of those smart cities in the country that holds great potential for future investments. From industrial growth, corporate and IT Parks, to major lifestyle developments, this city has it all. With government initiatives in the form of expressways, investment regions, commercial projects, etc., this city is booming in terms of demand for the estate.
3. Pune: How could someone potentially miss this happening city when it comes to finding a residential property? From luxurious lifestyle standards to seamless connectivity with major cities across Maharashtra, this smart city is definitely an ideal choice for investment. Considering the rental scenario, the return on investment is relatively high, and the presence of top real estate brands makes it more valuable.
4. Bhubaneshwar: This is the future city of India, where the potential for growth, education, and real estate is high. The lower cost of lifestyle blended with luxury residential projects makes it worth investing in. This city is home to educational institutions like IIT, AIIMS and holds a strong heritage to be cherished.
5. Jaipur: One of the most attractive tourist destinations of India, Jaipur is the capital city of Rajasthan. With cultural heritage and authenticity with the history, this city is rapidly growing. The ongoing metro development and other highways connect this city seamlessly. Also, the cost of living is low, but the standards are very high. The royalties and richness of culture attract the investors and homebuyers to invest in the real estate.
Finding a home in a tier 2 or tier 3 city in India is increasingly becoming a trend and an ideal option for investment for the future. The emerging demand within these cities is attracting investors from all around the country. These smart cities are offering major potential in terms of education, lifestyle, employment, and more. With seamless connectivity and future developments in the areas of urban infrastructure and real estate, the demand in the tier 2 and tier 3 cities is booming. The low cost of living, but blended with sustainability and luxury, is what makes these cities a strategic choice of investment for the future.
FAQs
Tier 2 cities have a lower cost of living and offer affordable property options making it a smart investment option.
Some of the best Tier 2 cities to invest in real estate in India are Jaipur, Indore, Lucknow, etc.
Some of the popular Tier 3 cities to invest in property in India are Mysuru, Nashik, Vijayawada, Madurai, Bhubaneshwar, Mangalore.
Tier 2 and Tier 3 cities are classified based on population size as well as infrastructure developments. Tier 2 cities are growing urban cities with good infrastructure, while Tier 3 cities are emerging hubs with developing infrastructure.
Tier 2 and Tier 3 cities are being called the New investment hotspots due to the affordable prices and better quality of life offered.
