Due to the pandemic, a significant change has taken shape in the geography of real estate development in India. Residential real estate in tier 2 and tier 3 cities is forecasted to see robust growth due to rising disposable incomes, reverse migration and improved infrastructure.

The COVID-19 pandemic has resulted in a major change in the locations witnessing real estate growth. Tier 2 and tier 3 towns are expected to record substantial housing real estate development. Several reasons are behind this trend, including reverse migration due to the work-from-home phenomenon, better infrastructure due to the Central Government’s Atal Mission for Rejuvenation and Urban Transformation (AMRUT), and rising disposable income amongst the stated cities’ residents.

Still, overall real estate growth has dipped due to the pandemic. Nevertheless, the Central Government and the Reserve Bank of India (RBI) have taken various steps to aid the sector.

On these topics, Sanya Aeren, Chief Advisor - Marketing and Communications, Berkshire Hathaway HomeServices Orenda India, elucidates, “There has been a phenomenal demand for residential real estate in tier 2 and tier 3 cities in recent times. However, the unavailability of housing units with overall quality and amenities like those available in tier 1 cities is still immeasurably high and is hampering growth.”

 

“Stamp duty cuts in several states, lower interest rates, the Pradhan Mantri Awas Yojana (PMAY) scheme, and the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund are all aiding the recovery of real estate”, she adds.

India’s burgeoning real estate market will remain the investors’ favourite, even from a global perspective. As the market recovers, private equity inflows are also expected to increase.