Indian buyers with limited budgets are turning to Tier II and Tier III cities to buy their real estate. Usually , these towns are located close to their native places. Even though they may not be able to live in these apartments now, these city workers feel secure in the knowledge that they have a place that they can turn to once they retire from their professional careers. In addition to this factor, growing industrialization and rising opportunities in the service sector are driving demand for housing in Tier II and Tier III cities.

As real estate boom gathered pace in the first decade of this millennium, a large number of metro-based developers announced housing projects in Tier II and Tier III cities. There were several reasons for their foray into smaller cities. The market in metropolitan cities had by then turned red hot. The price of land had risen to such high levels that most developers worried whether it was possible to develop viable housing projects at such prices.

In comparison, the price of land in Tier II and Tier III cities was far more moderate. While many micro-markets in metropolitan cities had saturated, in Tier II and Tier III cities, supply was still inadequate to meet the demand arising from the spread modern retailing , outsourcing, IT and manufacturing to these cities.

The cities of National Capital Region (NCR) hold the highest potential of future growth, providing maximum investment potential and have demonstrated the healthiest absorption rates during this dynamic phase of Indian real estate development. These cities are amongst the Top 10 cities ranked on absorption levels. Noida real estate has emerged as the leader in NCR.

Noida and Faridabad have demonstrated high absorption primarily due to launch of affordable housing projects. The recent projects of Jaypee (Aman) in Noida and BPTP (Elite Floors) in Faridabad were primarily driving the high absorption values in these cities with developers commanding more than 70% of the market share.

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Tags: affordable housing projects, Indian Real Estate, national capital region, Noida real estate

This entry was posted on Friday, January 22nd, 2010 and is filed under Tier 2 and 3 cities. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.