The Pandemic has prompted more and more people from small towns to explore residential property through virtual platforms. Cities like Prayagraj and Lucknow saw more than 100 percent growth in virtual residential demand in pre-COVID times, while cities like Sultanpur, Varanasi, Kanpur and Mirzapur saw more than 80 percent growth.
After the COVID-19 lockdown ended, housing demand around the Local cities like Prayagraj and Lucknow is gaining momentum. Increased flexibility due to reverse migration of the corporate workforce and remote working is fueling virtual residential and rental demand in these ‘shadow cities’.
The recently launched Yamuna Enclave and Grand’e by Solitairevalley.com stated that demand from smaller cities was steadily increasing, but saw a significant increase after the lockdown ended.
Tier-II cities have a realty market share of Tier-1 cities.
After the COVID-19 pandemic, many migrant millennia’s are working from their hometowns, as geography is no longer an obstacle. “People were paying a 3BHK rental in Smart city for Rs 45,000 approx. per month for the last two years, but with the epidemic and shifting of work base, People did not find it cost effective to continue in the city. Instead, People invested in an independent ready-to-move house in a gated community in their hometown, Allahabad, says Amit Joshi, who works in the shipping industry, which is a good decision.
While companies across industries have realized the advantages of work-in-home (WFH) against the backdrop of the coronavirus epidemic, there has been a large shift of employees towards Tier-2 cities, where the cost of living is low, work and life balance, is better and housing remains affordable. This has prompted Indian real estate developers as well as state governments to focus more on these high potential and yet neglected markets.
For example, in Uttar Pradesh, the government is working in partnership with the Solitaire Valley to build infrastructure to promote better living in the region and promote. As tech companies become location agnostic, alternatives such as Prayagraj can attract more investment. Several other states are working to encourage manufacturing in their major Tier-II cities, as part of the Make in India program. Analysts say that cities, which may also be part of industrial corridors, may be hotbeds for the future development of the economy and in particular the real estate market.
“Covid has made people realize the importance of a home in a gated community. Unlike metro cities, homes in Tier II and Tier III do not require large investments.
According to a study by Solitaire Valley, 70 to 75% of respondents in cities like Prayagraj, Lucknow, Mirzapur, Fatehpur, Banda, Jaunpur and Pratapgarh preferred to buy well-developed plots and independent villas instead of homes in group housing societies or in Rise of buildings. Solitaire Valley is investing Rs 200 crore to develop a township in Prayagraj.
Mayank Jaiswal, CEO of Solitaire Valley said, “Prayagraj is one of the major industrial districts of UP and our township will meet the need of quality lifestyle in a planned integrated township with a nature focused smart life.”
Solitaire Valley’s co-founder Shivani Jaiswal said that the demand for Tier II cities has been increasing over the years, in the backdrop of better connectivity, infrastructure and job opportunities.
“There has been an increase in inquiries and searches of properties compared to pre-covid months, which are lacking in budget, they are looking at alternatives in the suburbs,” Shivani Jaiswal said.
Benefits of Tier-2 cities over Tier-1 realty
While the cost of living in Tier-2 cities will decrease well, once the epidemic is over, moving back to the Tier-1 city can be a challenge. Jaiswal mentions that choosing fringe areas in Tier-1 cities that are becoming popular realty hotspots is an option.
“Major sectors have exhausted their capacity and are seeing saturation in their vacancy levels. In contrast, the fringe sector is now the ‘next’ for real estate, due to infrastructure development, improved connectivity and push by the government. For example, basic development is being seen in Prayagraj such as Allahabad bypass expressway.