Property Investors Eyeing Tier-II Cities in 2014
Real estate investors are increasingly eyeing Tier-II cities across the country for property investment in 2014, according to a survey conducted by Commonfloor.com. The cities that witnessed favourable response included Coimbatore, Faridabad, Gurgaon, Jaipur, Kochi, Lucknow, Mysore and Noida.
India’s real estate market is significantly emotionally driven and a lot depends on the sentiments persisting in the market. Commonfloor recently conducted a real estate survey to understand the current sentiments and overall outlook of property buyers in the country from a consumer perspective. The survey indicated that while Tier 1 cities topped the list for majority of investors, Tier II cities are not lagging behind. As compared to earlier reports, there has been a significant rise in demand by investors for properties in Tier II cities as well.
Preferred destinations for Property Investment
One of the key questions asked in the survey was related to the most preferred real estate destinations in the country this year. The survey provided buyers a list of 8 tier-I cities and 41 tier-II cities to choose from as their most preferred destinations for investment in real estate. The survey indicated that most respondents chose Tier-I cities over Tier-II cities as their most preferred investment destinations this year. At least 63% of the participants said that their preferred locations were among the eight Tier-I cities and the remaining 37% respondents opted amongst 41 tier-II cities. This is a significant rise as against our previous survey conducted last year.
The most preferred Tier-I cities included Mumbai, Pune, Bangalore, Chennai and Delhi. Interestingly, Pune and Chennai scored higher than Delhi as preferred real estate destinations in 2014. Prominent Tier-II cities in the chronological order included Coimbatore, Faridabad, Gurgaon, Jaipur, Kochi, Lucknow, Mysore and Noida.
Reasons for the emergence of Tier-II cities
While the tier-I cities were naturally the first choice of respondents as preferred real estate investment destinations, the interest of people in Tier-II cities too interestingly was quite significant. There are different reasons for this improving interest for tier-II cities. One of the key reasons for increasing interest is the development potential in these cities which is still untapped to a large extent.
Improving income levels of residents and their aspirations too have fuelled the demand in these cities. There are other positive factors such as employment opportunities and good infrastructure development that have improved the real estate prospects for these cities. Infrastructure in these cities has greatly improved in the last five years and continues to get better. For example, there is an upcoming Metro rail project in Chandigarh and a Seaport-Airport Road present in Kochi. There are several IT parks coming up in Coimbatore that have bolstered the growth of the city.
