Tier-II & III cities outpace metros in housing demand

Tier II & III cities are contributing more to the housing demand as compared to metropolitan regions across the country. Smaller cities have recorded better home loan offtake, beating the share of the metro by a significant margin, JLL Research said in its recent report. It also revealed that there are 45 districts representing Tier II & III cities that have registered higher growth than the national average. While the pace of home loan growth is at 19 percent in the last six years, the growth rate of districts which comprise the top 7 metro cities is at 12 percent during the corresponding period. Most of these cities have been driven by employment generation through manufacturing or services sectors like ceramic tiles, diamond processing, tourism, textiles, leather industry, agro-processing, automobiles, engineering goods, among others, said Director-Capital Markets Research, JLL Consultants, Jitesh Karlekar. The improved connectivity, infrastructure growth, better education, and health care facilities leading to improvement in living standards also helped the real estate developers in these cities to adopt the latest trends and provide homes at competitive rates. Cheap availability of labor and land cost have also fueled growth of home loans in such cities. Meanwhile, the government's initiatives like Smart city mission, Industrial corridors, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Metro Rail projects, PMAY are the other factors contributing to growth in these cities.