Nov

8

Real Estate in India- Tier2 cities growing rapidly

Filed Under Emerging Sectors, India Investment Opportunities, India Real Estate, Indian Companies, Metros, Tier-2 Cities, Tier-3 Cities 

The recent slowdown in the US economy has led to a similar slowdown in most developing economies. But the bullish Indian economy seems to be moving only in one direction, up! And the Indian realty sector is following the same pattern. Prices are still inflated and with both commercial & non-commercial realty demand on the rise, the trend seems set to continue.

Real Estate prices initially soared in the Metros, then the effect spilled over to the suburbs and now it’s moving on the Tier 2 cities. For example, prices kept escalating in Delhi for a long time, and then the effect spilled over to Noida and Gurgaon.

But now the rise is in tier 2 cities of neighboring states such as Agra & Lucknow (UP) and Chandigarh, Mohali, Panchkula & Manimajra(Punjab). These cities are coming up in a big way thanks to the entry of huge real estate developers like DLF, Sahara, Parsavnath, Omaxe etc.

These developers simultaneously build up huge shopping malls, commercial complexes and housing complexes/townships. This provides incentive to people to move in from over populated metros, by providing them with similar living conditions, in a less crowded environment.

In Lucknow itself, in the last 2 years, 2 new malls including multiplexes have come up. Down south, a similar boom is being experienced by Cochi(Kochin). Besides being a busy port since time immemorial, it has now become a commercial hub with high-rise apartments and multi-storied commercial centers.

Looking at the exciting new pace at which the sector is growing, a number of new players have jumped in. Godrej began Godrej Properties in 1990, and it has moved forward from simply building other Godrej plants and properties to now making a Rs.2000 Crore IT plant in Kolkota. Even Emami announced its plans to enter into Real Estate in March this year.

Real Estate has always been one of the most preferred investment options in India; it would seem a perfect time to invest in property in a tier 2 city. Property ownership, apart from having highly positive psychological implications, also provides tax and financial advantages. The current slowdown has affected the rate of inflation in prices, but we know that sooner rather than later the prices will rise, and the payoffs will begin!

Comments

One Response to “Real Estate in India- Tier2 cities growing rapidly”

  1. vaneet on December 31st, 2007 10:27 am

    Despite the highs and lows in countries like the US, the Indian Realty sector continues to grow in volumes and funds in the Year 2007. Hope the year 2008 will see more investors and big time developers coming into action, taking Indian Realty to the skies

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