Tier 2 cities will stand out as growth drivers in the coming year says SK Narvar, Chairman, Trident Realty
2022 has been a spectacular year for residential real estate in India. Positive sentiments among both buyers and developers have sustained the country’s real estate sector throughout the year. After two years of lull, the real estate sector is now experiencing a more noticeable wind of change. In response to the strengthening of buyer confidence, inquiries are rebounding, and developers are stocking up on inventory that is in line with demand.
According to an industry report, sales momentum continues to hold strong, and housing sales in the top seven Indian cities in 2022 witnessed healthy growth. According to Anarock data, the Jan-Sept period in 2022 witnessed the housing sales and new launches surpassing the 2019 record with 2.73 lakh units sold and new launches at 2.65 lakh units. Considering the performance of the realty sector throughout 2022 sets a great success path ahead.
The residential and rental demand in tier-2 cities like Tri-city (Chandigarh-Panchkula-Mohali), Ludhiana, Prayagraj, Lucknow, etc., have increased significantly this year. According to Anarock’s survey on consumer sentiment, 61% of respondents who prefer buying homes in Tier 2 cities are end-users, while the remaining are buying for investment. This shows the homebuyer’s growing interest in Tier 2 cities. Growth in these developing cities is largely driven by Indian and global MNCs now operating in most Tier 2 cities, flexible work models, and going strong with their expansions in small cities. Also, favourable government initiatives such as the AMRUT and Smart Cities Mission have made Tier 2 cities more economically viable. The serene lifestyle and premium living spaces in these cities are driving many residential and commercial establishments to sprout up.
Instead of settling in bustling metropolises, the working population is now relocating to their hometowns in Tier 2 cities for a more peaceful lifestyle amid the hybrid work model. Accordingly, the realty market in tier 2 cities holds immense potential in fulfilling the demands of homebuyers.
Additionally, the government’s consistent efforts to build efficient social infrastructure are creating employment opportunities in Tier 2 cities, as well as attracting various industry giants to establish their presence there. Tier-2 cities are likely to gain further momentum as prime residential areas in the coming year due to a growth in economic activity and job opportunities. Also, because of the infrastructural developments going on in full swing, such developing cities have the potential to compete with Indian metropolises, which is why they are becoming increasingly popular with sophisticated consumers and investors from around the globe.
As we head toward 2023, we can expect the housing segment to continue its upward trend. Also, with robust buyer demand steering the growth pattern, real estate remains optimistic for the coming year. The combination of a vibrant economy, the restoration of community activities, and favourable government initiatives to advance Tier 2 cities will create a positive environment for the real estate sector to thrive in 2023.
