Tier II cities emerging as real estate engines, report reveals

Tier II cities like Nagpur, Coimbatore, Bhubaneshwar, Indore, and Jaipur are emerging as real estate growth engines, according to a report from Magicbricks.

While rental demand in Nagpur is the highest at 84 percent, the cities observed the highest year-on-year (YoY) growth of 49 percent for Nagpur, 27 percent for Coimbatore, and 12 percent for Bhubaneswar.

Coimbatore and Indore witnessed 30 percent and 6 percent YoY growth respectively, the report mentions.

Chief executive officer (CEO) of Magicbricks Sudhir Pai said Covid-19 was a watershed moment for real estate, especially for Tier II cities that have emerged as real estate growth engines.

“Additionally, government initiatives like AMRUT and the Smart Cities Mission have helped these cities evolve into new economic hubs. With an uptick in economic activity and employment opportunities, we expect Tier II cities to gain more momentum as prime residential markets in the coming months,” he added.

In Bhubaneswar, the residential demand increased 5 percent Quarter-on-Quarter (QoQ) and 12 percent YoY, while the rental demand declined 15 percent QoQ.

Coimbatore grew 12 percent QoQ and 27 percent YoY, while rental demand increased 11 percent QoQ and 30 percent YoY. As per the report, 43 percent of homebuyers prefer the 2BHK configuration, and 30 percent of homebuyers are searching for properties priced between Rs 25 – Rs 50 lakh, followed by 23 percent in the Rs 50 – Rs 75 lakh range.

In Jaipur, the aggregate demand for residential properties increased 5 percent YoY while the rental demand grew 17 percent YoY.

In Nagpur, the residential grew 25 percent QoQ and 49 percent YoY, with an increased rental demand of 84 percent YoY. There was a preference for 2 BHKs, constituting 44 percent of the total residential demand and 45 percent of the homebuyers preferred property sizes between 1,000-1,500 sq feet.

Additionally, the residential demand in Indore increased 12 percent QoQ and 2 percent YoY, while the rental demand increased 6 percent YoY. The report says that 42.5 percent of homebuyers preferred 3 BHK units and 22 percent of homebuyers are keen to opt for units in the size range of 1,000-1,500 sq feet.