Finance

Influence of the coronavirus: The demand for homes in Tier II cities is growing

influence-of-the-coronavirus-the-demand-for-homes-in-tier-ii-cities-is-growing

However, lockdowns and health concerns from Covid-19 linked to the company's decision to work from home have further fueled the trend

In July of this year, Jagdish Sharan, 37, moved to his hometown of Pratapgarh to take care of his sick father as Covid made it difficult to manage things from Delhi.

“I bought a 4-BHK apartment in a community. All I needed was high-speed internet and a study I received, plus services similar to those of a closed company in NCR, ”said the graphic designer, now-at-home (WFH) for an Indore-based company works for digital marketing.

It is similar with Pramod N Patil (40), a content writer for specialty chemicals. Patil returned from Vapi (Gujarat) to Nashik, his hometown, where he works for a pharmaceutical company.

“I moved into a 3-BHK apartment on the ground floor and studied in a closed society with my family during Navratras. It's better that way because I have to report to only work 3-4 times a month, ”he said.

Both Sharan and Patil are part of a growing list of entrepreneurs and consultants who, over the past six months, have chosen to return to their families in Tier II and III cities without compromising careers.

Analysts point out that the trend has been going for six to seven years as economic growth hit smaller cities and the digital economy proliferated.

Lockdowns and health concerns over Covid-19, coupled with the company's decision to join WFH, fuel this trend.

“If you analyze residential property sales from 2014 to 2019, Tier I cities grew 28%, but Tier II cities grew 51% faster.

This is mainly due to the fact that Tier II cities have received better traction through government programs like Pradhan Mantri Awas Yojana (Urban).

In contrast to Tier I cities, there is affordable housing at a convenient distance from the city center, ”says Pankaj Kapoor, Managing Director of Liases Foras, a real estate consultancy.

Kapoor said professionals who have spent five to six years in the service would be more likely to return to their hometowns if the economic situation permits.

"Those who have lived in a city for 10-15 years would face issues like children's education etc. that could put them off. They are more likely to buy a bigger house," he added.

Aakash Ohri, Senior Executive Director (Sales and Marketing) at DLF, agrees.

“Pandemic has accelerated sales in smaller towns, as some of these living spaces are available in developed and familiar townships. The demand for condominiums and integrated townships in Tier II cities has also increased, and the need for safer environments and amenities in closed communities has increased, ”he added.

According to Ohri, DLF recently opened a limited number of 188 lots (ground floor and two floors) for sale in its DLF Hyde Park community in New Chandigarh, for which it has received inquiries from NRIs in Canada and the UK.

Similarly, in June DLF received an overwhelming response to the launch of its Weaker Economic Sections (EWS) and Low Income Groups (LIG) units in Garden City, Lucknow, with nearly double the number of applications.

Anand Singhania, a leading developer from Chhattisgarh, said: “People, especially in the service sector, are trying to withdraw because they feel they can find work in the city, even though the salary is lower than in big cities. Raipur now has a well-established and growing base for service, education and small industries. Naya Raipur, a smart city, is here too. “Singhania is also chairman of the Credais MSME wing real estate association.

Nitami Kumar, Managing Director and CEO of Emami Realty, said that many companies plan to continue their work from home and that policies like Atmanirbhar Bharat and Make in India will create opportunities in Tier II and III cities. The return migration will likely continue for some time, so the demand in these cities will increase.

“At Emami Realty we have several plans for Tier II and III cities. During Covid, we started our housing project in Jhansi, which was well received. We got 100 bookings in 100 days, which is fantastic in a city like Jhansi, ”he added.

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Steven Gregory