There are eight metropolitan tier 1 cities in India – Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata, Ahmedabad and Pune. On the other hand, 104 cities are categorised as tier 2 cities in India, while the remaining cities fall under the tier 3 or tier 4 cities in India category.
Tier 1 cities in India are densely populated and have higher living expenses. There are major international airports, industries, top multi-specialty hospitals, education, and research institutes in the Tier 1 cities. The economic activities and lifestyle in the cities like Gurgaon, Noida, Vellore, Coimbatore, Kochi, Thiruvananthapuram, Patna, Rajkot, Goa, Lucknow and Jaipur could elevate these tier 2 cities in India to the next level in the coming years.
Real estate trends in Tier 2 and Tier 3 cities
- Land availability and affordability factor: With real estate markets in metro cities becoming saturated owing to limited land availability, real estate developers are exploring the potential of smaller towns and cities owing to better land availability. Compared to these larger cities, smaller cities have lower land prices and are thus seen as a favourable destination for affordable housing developments.
- Development of infrastructure: There are major infrastructure projects, such as the Delhi-Kolkata Expressway, that aim to boost connectivity in many smaller cities, especially Tier 2 cities, thereby pushing demand for real estate in the neighbouring regions.
- Growth of industrial hubs: Tier 2 cities in India and tier 3 cities in India are emerging as hubs for several industries, including logistics and warehousing sector. This has resulted in growing economic activities, attract several working professionals from different areas. As a result, the demand for housing has increased. Consequently, there has been a growth of real estate projects catering to this demand.
- Rise in employment opportunities: Many tier-2 cities, such as Raipur, Lucknow, and Jamshedpur, have become a favourite location for numerous start-ups, industries and IT companies. This has drawn numerous working professionals, generating demand for housing.
- Increasing demand for premium homes: The preference for leading a modern lifestyle with various amenities is increasingly seen in areas beyond metros. The growth of nuclear families and evolving lifestyle needs among people are fuelling the demand for modern gated communities. Moreover, many affluent buyers are now looking to buy a second home in smaller cities, bringing a significant shift in the buyer sentiment.
Top tier 2 city in Jharkhand
Bokaro Steel City
Bokaro, also known as Bokaro Steel City, is a tier 2 city in Jharkhand. A major industrial and commercial hub, Bokaro Steel City, is emerging as one of the preferred investment destinations.
Jamshedpur
Jamshedpur is a neighbouring city of Ranchi situated in the East Singhbhum district, known for its thriving industrial and agricultural activities and tourism. The tier 2 city also offers ample investment options.
Dhanbad
Dhanbad, also known as Coal City, is a tier 2 city in Jharkhand. A major industrial and commercial hub, Dhanbad City, is emerging as one of the preferred investment destinations.