Tier-2 cities closing gap with India’s Top 8 as property prices surge by 10-15% in prime areas: Report

financialexpress.com:

Fuelled by economic diversification, rising consumer demand, and reverse migration patterns accelerated by the pandemic, the real estate markets of Tier-2 cities are witnessing remarkable growth trends, and these once overlooked urban centres are rapidly closing the gap with their Tier-1 counterparts, according to Housing.com’s ‘The Bharat in India’ report.

This surge can be attributed to the burgeoning economic potential of these cities attracting a growing influx of residents. Notably, this trend has gained momentum in the wake of the pandemic and fuelled by the phenomenon of reverse migration.

The economic dynamism has had a multiplier effect on the real estate market in Tier-2 cities especially in retail, warehousing and residential segments. For instance, the burgeoning interest from national and international brands has catalyzed the development of high-street areas and premium retail spaces in these urban centers. Notably, Kochi in Kerala stands out with the largest mall in India, showcasing the evolving retail landscape in these regions.

Furthermore, the escalating e-commerce activity has prompted companies to expand their presence in these cities. A prime example is the leasing of approximately 6.1 lakh sq ft of space for an Amazon fulfilment center in Lucknow, marking its largest center in India. Moreover, the development of industrial corridors with Tier-2 cities as integral parts, alongside airports being equipped with cargo handling facilities, has propelled growth in the warehousing sector.

Similarly, the property markets have experienced heightened activity. This is underscored by Housing.com’s Property Buy index, which tracks high-intent homebuyer activity, indicating that Tier-2 cities are trending above