Do Tier II Cities Have More Scopes For Bigger Revenue Generation?

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Towering price of urban residential apartments results in increasing development scopes in tier II cities. Peripheral areas of the tier I cities and suburbs are emerging as blooming development areas for real estate. Investors are keen on investing in tier II towns and cities because, these places have lower cost of living which includes lower labour charges, lower logistic cost and greater availability of lands which ensures larger scopes for realty development. All these young and dynamic markets have a higher opportunity for return investments.
House price index of Reserve Bank of India (RBI) revealed that there is a double-digit growth deriving from the small cities. In some cases it’s even more than metros. This report also indicated that India needs to maintain 7-8% growth per annum, and then it will be backing the required growth of productivity in the tier II cities. On the vehicle of affordable housing sector, currently India is focusing on urbanization of developing areas. Along with the Smart City Mission, Indian market is going to witness 100+ cities with the capacity of which India’s GDP can evolve. In 2017 budget India has given infrastructural development to the affordable housing sector. This move is likely to bring more investment and industries to open in these emerging cities.
With the industry step in, infrastructure status of these tier II cities will be in need of further enhancement, as there will be more migration from the neighbouring areas of to tier II locations which will result in their expansion.

Let’s scrutinize how far the tier II cities can return your investment-

1. There is an improved economic bustle such as growth in IT enabled services (ITES), merchandizing and economic services in such cities for low real estate prices, lowering employment costs and ease in logistics.
2. There is an advanced multiplier upshot of expansion in such Tier-II towns and cities and which also act as a catalyst in the social infrastructure sector.
3. In such cities, the real estate costs are really low due to lower land, employee and operating costs. Cheaper cost of living with better standard of living residential realty sector will have to keep this combination alive to attract more investors.
4. Strategically these cities have to be designed with more greenery and open space for to maintain the environmental counterbalance.

National Housing Bank’s Residex’, an analysis shows from 2007-till now almost all tier-II cities have witnessed their residential property value realization by 45-120 per cent. Facts that have been playing adverse role in the development process are weak infrastructure, appropriate choice of property site, appreciation record of the catchment etc. Hence, low cost of living could be the major driver of investment. Accepting this major fact, the following course of investment can expect fat return against the invested.
Rajarhat is one area of Kolkata which possesses the most advanced infrastructure ITES. People are showing more interest in buying flats in Rajarhat, as these properties are advanced quality luxury projects and economical as one. The properties have every lifestyle facilities all around. Rajarhat is contributing in Kolkata real estate business alone by 25-30% presently.

LNN (Liyans News Network)

1 thought on “Do Tier II Cities Have More Scopes For Bigger Revenue Generation?”

  1. Excellent posts.I am very happy to read this. This is the kind of manual that needs to be given and not the random mis information that’s at the other blogs.

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