Tier-II cities are pushing the growth of the Indian real estate sector, revealed a Magicbricks report. Titled “India’s Tier 2 cities: Emerging Real Estate Growth Engines”, the report stated that cities like Bhubaneshwar, Coimbatore, Indore, Jaipur and Nagpur are the engines behind the burgeoning real estate market. These cities have recorded year-on-year growth in residential units and rental demand. Nagpur led the lot, with a 49 per cent YoY spike in residential demand and a whopping 84 per cent hike in rental demand.
Year-on-Year Growth
In terms of residential demand rise, Coimbatore saw a YoY growth of 27 per cent while for Bhubaneswar, it was 12 per cent. In Jaipur, the YoY total demand for residential properties increased by 5 per cent. In Indore, this number was at a much lower 2 per cent.
With residential demand spiking, rental demand also registered growth in all these cities. In Coimbatore, the rental demand grew by 30 per cent YoY, whereas in Jaipur and Indore it went up by 17 and 6 per cent respectively.
Quarter-on-Quarter Growth
The quarter-on-quarter residential/housing demand increased in most of these Tier-II cities. For Bhubaneshwar, the QoQ growth stood at 5 per cent, while Coimbatore recorded a 12 per cent spike. Like Coimbatore, Jaipur also saw a 12 per cent spike in residential demand QoQ. The residential demand in Nagpur grew by 25 per cent this quarter.
According to Moneycontrol, the CEO of Magicbricks, Sudhir Pai, stated that COVID-19 served as a landmark moment for real estate, particularly for tier 2 cities. These cities have emerged as real estate growth engines, Pai said.
The executive also went on to say that “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 tier 2 cities to gain more momentum as prime residential markets in the coming months.”
Besides government initiatives, the report has also mentioned the presence of Indian and foreign MNCs in most of these places. Indian MNCs like Infosys and TCS have a presence in 80 per cent of these cities. Foreign transnational corporations are slightly behind, with a presence in almost 60 per cent of these cities.
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