Small Cities Gear up for Builders

“Real estate players are looking to smaller cities mainly because of the cash subsidy interest under the PMAY scheme and 100 per cent tax exemption for flats of 60 sq. m. carpet area in these cities,” said Anand Gupta, former General Secretary, Builders’ Association of India. And according to Real Capital Analytics (RCA), non-metro cities have seen a growth of 17 per cent in real estate investments in 2017 over 2016. Cities which are performing well economically, with favourable job creation prospects tend to attract migration, which in turn creates demand for new homes and rental housing. According to industry experts, Surat, Jaipur, Nagpur, Kochi, Lucknow, Rudrapur, Nashik, and Mysuru are among the sought-after cities for developers. Tier-2 and 3 cities that are closer to metros always have an advantage. However, it seems secondary sales in these markets have not picked up as fast as primary sales, and it is largely because prices in the primary sales segment in many cases are on a par with the secondary sales. In other words, buyers can get a new flat for almost the same price as an older one, in the projects, which have better and modern amenities. Rental status is also an important aspect. “The growth in this segment depends on two factors: those coming to these cities for jobs for a temporary period and student housing,” said Gulam Zia, Executive Director, Advisory, Retail and Hospitality, Kinght Frank (India) Pvt Ltd.