A recent report by Housing.com highlights a significant trend in India's real estate market: Tier-2 cities are experiencing a surge in interest from homebuyers and investors, driven by economic diversification, rising consumer demand, and a post-pandemic relocation trend. Dhruv Agarwala, Group CEO of Housing.com, notes that cities like Kochi, Jaipur, Goa, and Chandigarh are leading the charge, now outperforming the top eight metros by 88 points on the Property Buy Index. Property values in premium locations of these cities are approaching those of Delhi and Mumbai, with impressive year-on-year growth of 10-15%. Additionally, rental yields in Goa reach as high as 8%, compared to 2-3% in major metros, attracting significant investor interest. Online searches for homes priced above INR 2 crore have increased by 121% in Tier-2 cities, highlighting their growing importance and potential in the real estate market.
A recent report by Housing.com sheds light on a significant trend in India's real estate market: Tier-2 cities, once overlooked urban centers, are experiencing a surge in interest from both homebuyers and investors. This growth is driven by several factors, including economic diversification, rising consumer demand, and a post-pandemic trend of people relocating back to their hometowns.
Dhruv Agarwala, Group CEO of Housing.com, emphasized the changing landscape, noting that the real estate market is undergoing a rapid transformation. Tier-2 cities like Kochi, Jaipur, Goa, and Chandigarh are leading the charge, emerging as major growth engines. Housing.com's data reveals a surprising fact: Tier-2 cities now outperform the top eight metros by a substantial 88 points on their Property Buy Index. This underscores their growing importance and potential, particularly in the service sector.
Key areas within these Tier-2 cities are witnessing impressive property value growth. Year-on-year increases of 10-15% are narrowing the price gap between Tier-2 and Tier-1 cities. In fact, premium locations in Goa, Chandigarh, and Kochi boast property values approaching those of key markets in Delhi and Mumbai.
Tier-2 cities also offer significant advantages for rental property investors. Goa boasts attractive rental yields as high as 8%, compared to just 2-3% in major metros. These factors are influencing homebuyer preferences, with a shift towards modern high-rise apartments featuring desirable lifestyle amenities like clubhouses, open spaces, and sports facilities.
Online property searches reveal a clear trend. Searches for homes in the 1-2 crore price range (approximately USD 130,000 - USD 260,000 USD) have jumped by 61% in Tier-2 cities. Even more significant is the 121% increase in searches for properties exceeding 2 crores. This data suggests growing investor confidence in the potential of Tier-2 markets.
Dhruv Agarwala noted that the economic landscape is shifting, with tier-2 cities becoming magnets for skilled professionals and the startup ecosystem. This report highlights a significant shift in India's real estate market, presenting exciting opportunities for investors, developers, and homebuyers seeking options beyond traditional hotspots. Tier-2 cities are no longer on the sidelines; they are becoming major players, offering attractive investment opportunities and a promising future.
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