Real estate news on Is it right to invest in tier II cities?

Real Estate Tips, Mysore, Kochi, Bhopal, Indore, Coimbatore, Omaxe Limited
Posted on Oct 17, 2013
When a dejected Utpal Srivastava, a white collar professional working in Delhi, could not afford his dream abode in East Delhis Mayur Vihar and invested in a 2BHK housing unit in his hometown Raipur instead, he didnt realise hed hit the jackpot. The said property, bought in 2010 “for a pittance” has appreciated almost 70 per cent in three years time and have wiped all doubts in Bose mind about his investment choice.

For those like Srivastava, for whom property values in metros is way beyond their means, are now looking at investment opportunity in tier II cities, preferably hometowns. With an increase in demand in the residential sector, consumers (both residents and non-residents) are looking at tier II cities such as Chandigarh, Lucknow, Bhopal, Indore, Jaipur, Raipur, Kochi, Coimbatore, Mysore, etc as potential residential hubs.

“Fuelled by increasing urbanisation and rising incomes, tier II cities are witnessing increase in demand for property, especially apartments in gated communities and integrated townships. Opening up of employment avenues, development in social infrastructure, connectivity and infrastructure are factors influencing purchase of property in smaller cities. Moreover, the appreciation too is high,” says Rohtas Goel, Managing Director, Omaxe Ltd. Omaxe has recently tied up with the Intercontinental Hotel Group to build a five star hotel in their integrated township Omaxe New in Chandigarh.

After the successful launch of DLF My Pad, a studio apartment project in Lucknow, DLF is developing another integrated city, Gardencity, on NH-24B, Lucknow. Spread over 250 acres Gardencity will initially offer residential plots and later residential, retail and hospitality projects.

Business opportunity and demand have attracted big players such as DLF, Parsvanath Developers, Omaxe, Amrapali Group, Supertech Ltd, Sobha Developers and others to launch massive projects in small cities.

Modern facilities and values within the affordable range – say and average of Rs 2,500-4,000 per sq ft – are encouraging buyers. Commented Sumit Bharana, Director, ERA Landmarks Ltd, “With urbanisation, the growth in real estate industry would be visible in every city. However, the tier II cities attract the most consumers. As the peripheral infrastructure including transportation, education and employment, improves in various cities, the real estate industry witnesses corresponding growth.”

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