According to a report by Magicbricks, a platform for buying and selling property, Tier 2 cities emerging as real estate growth engines with Nagpur, Coimbatore, Bhubaneshwar, Indore, and Jaipur leading the pack.
The report titled, “India’s Tier 2 cities: Emerging Real Estate Growth Engines” says that the mapping property related trends across these five tier 2 cities, points out that Nagpur (49%), Coimbatore (27%), Bhubaneswar (12%) observed the highest year-on-year (YoY) growth for residential demand. Nagpur (84%), Coimbatore (30%), and Indore (6%) exhibited the highest year-on-year growth for rental demand searches.
Elaborating on the trends, Sudhir Pai, CEO, Magicbricks, said, “Covid-19 was a watershed moment for real estate, especially for Tier 2 cities that have 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 Tier 2 cities to gain more momentum as prime residential markets in the coming months”.
The report also observes that Indian MNCs such as Infosys and TCS are present in 80% of these cities while foreign MNCs such as IBM are present in almost 60% of these cities, with further expansion plans. The report says that in quarter two (Q2) in Bhubaneswar, the residential demand increased 5% quarter-on-quarter (QoQ) and 12% year-on-year, while the rental demand declined 15% QoQ. The report says that 37.7% of the customers preferred homes between 1000-1500 square feet (sf).
Residential demand in Coimbatore grew 12% QoQ and 27% YoY, while rental demand increased 11% QoQ and 30% YoY and 43% of homebuyers prefer the 2-BHK configuration, 39% of homebuyers are searching for properties priced between ₹25-50 lakh, followed by 23% in the Rs 50-75 lakh range.
In Jaipur, the aggregate demand for residential properties increased 5% YoY, while the rental demand grew 17% YoY. The demand for 3-BHK configurations constituted 57% and majority (35%) of the homebuyers preferred units in the 1,000 to 1,500 sq. feet bracket. Residential demand in Nagpur grew 25% QoQ and 49% YoY, while the rental demand increased 84% YoY. There was a preference for 2-BHKs, constituting 44% of the total residential demand and 45% of the homebuyers preferred properties in the size bracket of 1,000 to 1,500 sq. feet.
Residential demand in Indore increased 12% QoQ and 2% YoY, while the rental demand increased 6% YoY. The report observed that 42.5% of homebuyers preferred 3 BHK units and 22% of homebuyers keen to opt for units in the size range of 1,000 to 1,500 sq. feet.