Robust demand for housing property in T-2 cities as prices rise 94%

Economic diversification, rising consumer demand, better connectivity, and reverse migration patterns accelerated by the pandemic have played a major role in this growth -- Santosh Agarwal, CFO and Executive Director, Alpha Corp Development

Mumbai: There is a significant rise of 94 per cent in residential property launch prices in Tier 2 cities over the last five fiscal years, as shown by the PropEquity report, underscores robust demand, feel experts.

Talking to Bizz Buzz, Santosh Agarwal, CFO and Executive Director, Alpha Corp Development says, “The significant rise of 94 per cent in residential property launch prices in Tier 2 cities over the last five fiscal years underscores the robust demand and growing economic potential in these regions.”

Economic diversification, rising consumer demand, better connectivity, and reverse migration patterns accelerated by the pandemic have played a major role in this growth, he said.

The study has reported a double-digit surge in launch prices in 24 out of 30 Tier II cities in the last 5 fiscal years. However, the remaining six recorded a single digit price appreciation.

Alphacorp's projects in Tier-2 cities, like Meerut, Karnal, and Fatehabad, are attractive destinations for both homebuyers and investors eyeing both growth and development. Not to forget, the future looks promising for the industry in these emerging Tier 2 cities directed by continued development, he said.

Agra, Goa, Ludhiana, Indore, Chandigarh, Dehradun, Ahmedabad, Bhubaneshwar, Mangalore and Trivandrum – reported double digit growth ranging from 54 per cent to 94 per cent between FY 2019-20 and FY 2023-24.

Vijay Harsh Jha, founder and CEO, VS Realtors (I), a Gurugram-based property brokerage firm said, “The surge in demand witnessed in tier 2 cities post-Covid has shown no signs of abating. This is evident from the massive rise in prices in the last five years across most of these cities.”

With large-scale connectivity infrastructure, top corporates are flocking to these cities thereby generating employment and in turn creating a strong demand for housing, he added.

Tier 2 cities offer a lower cost of living, making them attractive for homebuyers seeking value. This affordability fuels demand for residential properties, compared to Tier 1 cities. In addition, enhanced connectivity brings amenities like educational institutions and healthcare facilities closer, making tier 2 cities more attractive for families and young professionals.