Though the country witnesses a slump in housing sales, the smaller cities remain upbeat. Assisted by the government’s push for affordable housing, the smaller cities in the country have recorded consistent growth in the last five years. Apart from the government’s initiatives like Pradhan Mantri Awas Yojana (PMAY), which has helped pushed the demand for affordable housing segments to an extent, smaller towns and cities also offer “more conducive land” to promote-low cost housing.
Sourabh Mehrotra, National Director, Knight FrankFrank, a property consultant firm is of the view that though the growth in the smaller towns is nothing substantial, they remain largely unaffected by the bubble in the market. He further illustrates that lower land prices have helped the developers in coming up with low housing projects in smaller towns as the capital cost here can be brought down to 25-30%.
Mehrotra further states that the mega affordable projects like 7-10 lakh have come up in smaller towns. Economical land prices, as well as government subsidies, has assisted the local developers in coming up with low-cost housing projects at these places.
The developers, however, are of the opinion that the growth that the tier-II cities have shown in the last five years is only “a green shot” as job market enhances beyond the metros. Though it will take a few more years to witness similar demand in prominent cities like NCR, Mumbai etc.
A spokesperson with property developer Puravankara Group. opines that quite a few smaller cities in India will most probably witness an incremental development because of the kind of emphasis that the government is giving on developing smart cities. Though it continues to be a long term story.