The Real estate sector in India has witnessed huge transformation in past few years. The most interesting trend amongst the consumers is change in their outlook and preference towards small cities and suburbs. These tier 2 / tier 3 cities offers better quality of life at lower cost with better amenities and overall infrastructure.
Although overall investment sentiment is its all-time low in last 2 quarters due to Covid19, but those having enough disposable income and still looking to have decent property at reasonable cost are considering moving to small towns or states like Goa.
Why Tier 2 and Tier 3 cities are said to be the best for investment in residential real estate properties?
The growth of real estate sector in most of tier 2 / tier 3 cities like Bhopal, Lucknow, Jaipur, Ahmedabad, Indore, Kochi, Vijayawada, Coimbatore, Vishakhapatnam, Chandigarh and small states like Goa is due to growing business activity thus influx of migratory population. This led to development of overall infrastructure like transportation, schools, medical facilities and malls etc.
Here are some factors behind the emergence of Tier 2 and Tier 3 cities as a hotspot for investment in India.
- Growth in infrastructure
- Government Support
- The Balanced markets
- Lesser prices
- Retirement home investment
Growth in Infrastructure
Many of the Tier 2 and Tier 3 cities enjoy the transport services, the social facilities, accessibility and basic infrastructure. Metro lines, new business hubs and airports are natural opportunities for jobs, appreciation rates and an increased demand for the future.
The Government has taken steps to improve the expectations in real estate market. Various initiatives are running to upgrade the urban infrastructures. Those include the construction of airports, the upgrading of the Mass Rapid Transit System (MRTS) and the creation of Special Economic Zones (SEZs).
Rational GST for real estate has been introduced. The change aims at promoting immobilization and prospective buyers on the market in Tier 2 and Tier 3 cities especially states like Goa.
The Balanced Markets
The Tier 2 and Tier 3 cities are balanced and have a broad scope for future investment opportunities. In these cities for example in Goa, the supply of land is higher than in the major metropolitan areas. This helps to balance the market. By keeping consumers’ prices lower without compromising the size of their ticket.
In the Tier 2 cities, constructing a house is cheaper than constructing same unit in the Tier 1 city. In these cities the price of the land and the cost of materials is lower. Furthermore, the development of housing units is a lucrative offer for developers in Tier 2 markets, thanks to the easy availability of skilled labor. Here is one more reason why invest in real estate in Goa.
Retirement home investment
Goa’s got everything from affordable housing to luxury retirement housing projects. Goa is a hot destination amongst the buyers for buying retirement homes. Indians, NRIs and foreigners also invest in residential properties in Goa.
Goa being tourist hotspot in India, offer rent back option as well. One may earn EMI equivalent rentals from leasing the property in Goa. In summary, tier 1 / tier 2 towns and small states like Goa will always be lucrative choice for safe and secure investment.