Tier 2, 3 cities ready to flex their realty muscles: Experts

Chandigarh, April 30: India’s real estate development has been experiencing a boom in the major cities and tier 2 and 3 cities. The growth in these cities can be attributed to infrastructure development, such as new roads, rail, and rapid rail transport, which have improved connectivity. Additionally, the rise of realty prices in the cities has pushed development to tier 2 and 3 cities where affordable spaces are in demand.

The pandemic has also led to a change in the mindset, and the desire to say as close to their hometown as possible has become an important consideration. This shift has created a need for small and affordable spaces in these cities.

LC Mittal, Director Motia Group says, the commercial real estate is booming not just in metro cities but in tier 2 & 3 cities as well. Commercial development in these cities has never had it so good. The push towards creating new road and rail connectivity is also contributing to this. At the same time, the trend towards entrepreneurship and the consequent need for spaces at affordable rates also acted as catalysts and led to the prominence of tier 2 and 3 cities.

According to Tejpreet Gill, MD, Gillco Group the large corporations and industrial houses have also bet big on tier 2 and 3 cities for affordable infrastructure, office spaces, warehouses, co-working, retail, and more. The government has been steering efforts to boost infrastructure development across these cities, and many states are working to incentivise manufacturing in key tier 2 cities as part of the Make in India program.

Moreover, the Union Budget 2023-24 announced the creation of an Urban Infrastructure Development Fund (UIDF) managed by the National Housing Bank. The fund will be used by public agencies to create urban infrastructure across tier 2 and tier 3 cities in the country.

India’s real estate sector is spreading its wings beyond major cities. The saturation in the real estate sector in metro cities and the growing economic significance of smaller towns have been the primary reasons for the growth of the real estate sector in these cities over the past few years.