These Tier-II & Tier-III Cities Are A Good Bet For Property Investors

The real estate scenario in metros and state capitals has either reached the skies in terms of prices or has already reached the peak of its potential. Due to this, the realty value appreciation in some metros is as low as two to three per cent annually. Some are showing signs of stagnation or even depreciation. That leaves two options for those looking at investing in real estate solely for investment purposes — Tier-II and Tier-III cities.

With many information technology (IT) companies and other industries focusing on these cities, state governments have given a special thrust to development there. Adding to this is the developers' interest in such cities. These cities are flooded with under-construction apartments and high-rises. Most of the cities have a number of apartments in the affordable range between Rs 19-35 lakh for a 2BHK flat.

Here is PropGuide's pick of top Tier-II and Tier-III cities for investors.

Ahmedabad

Ahmedabad is the biggest city in Gujarat, a state well-known for its development model and substantial growth. The city has multiple upcoming projects. One such project is Gujarat International Finance Tec (GIFT) City. GIFT is conceptualised as a global financial and information technology (IT) services hub, designed to be on a par with globally benchmarked financial centres. Coming up at Dholera, the project lies at the edge of the upcoming corridor.

With these possibilities of growth, Ahmedabad's new areas are witnessing development, offering a wide range of apartments on sale. In the new areas, a one-bedroomed apartment costs under Rs 20 lakh. New-age luxury apartments in Ahmedabad, with three bedrooms or more, cost Rs 1.5 crore and above.

Bhopal

With many manufacturing giants setting shop here, Madhya Pradesh capital Bhopal is in the middle of a realty development. Expecting the city population to go up substantially due to this, many builders have flown to Bhopal. The city has as many as 70 under-construction projects.

Bhopal offers investors a choice between high-end to affordable apartments. Depending on the building and the society, a 2BHK flat in Bhopal may cost anywhere between Rs 25-65 lakh.

Indore

With support from the Madhya Pradesh government, Indore has positioning itself as the start-up hub of the country. The real estate in Indore is thriving, as the city encourages data centres to set up their servers here, with a park dedicated to it.

Though the realty is fast catching up, apartments in Indore are still in the affordable zone, with a decent 2BHK costing around Rs 20-22 lakh.

Lucknow

Uttar Pradesh capital Lucknow, also known as the city of Nawabs, is now being claimed by IT companies. A new IT hub has been announced around the city, expanding its limits. This spurred real development around areas such as Gomti Nagar, Gomti Nagar Extension and Sultanpur Road.

While a 2BHK apartment in Lucknow's new areas costs around Rs 36-45 lakh, prices in high-rises are going as high as Rs 65 lakh.

Chandigarh

Chandigarh, the state capital of Punjab and Haryana and also a Union Territory, is famous for being home to the rich in surrounding states.

The city is growing within along with newly formed suburbs, thanks to the increasing IT and BPO (business process outsourcing) population. Chandigarh is showing potential beyond these two sectors, with companies setting up offices in Zirakpur, Panchkula and Mohali.

A 2BHK apartment in Chandigarh's new areas will cost around Rs 35-40 lakh.

Jaipur

The Rajasthan Government is all set to make Jaipur, its capital, a smart city along with Ajmer. Powered by Cisco, the city will become a wi-fi zone, with all the other developments in digital and other infrastructure around it. After it is done, the pink city will have real-time traffic and weather updates, making it a realty hub along with enhancing tourist experiences.

A regular 2BHK apartment in Jaipur currently costs around Rs 20 lakh or less.

Kochi

Kerala has always been a good destination for real estate, thanks to NRIs (non-resident Indians) pumping in money here. The IT sector's increasing interest in Kochi, Kerala's biggest city, has proved to a boon for the realty sector. The city was earlier known only for being a tourist spot.

Realty developers have brought in high-rises and urban style apartments, hence creating a demand. A 2BHK flat in Kochi costs around Rs 35-40 lakh, depending on the amenities.

Coimbatore

The real estate in Coimbatore, the second-biggest city in Tamil Nadu, has been labeled as a safe bet for investors.

The city, which has been concentrating only on small-scale textile industry, is slowly graduating to other industries, making the real estate more valuable. It is attracting a variety of investors, be it IT companies or people looking for a home after retirement.

While an individual home here comes for Rs 50-60 lakh, a 2BHK apartment in Coimbatore may cost you Rs 30-40 lakh.

Vijawayada

Vijaywada, the capital of Seemandhra, is bracing for a large scale development, including building of a State Assembly complex. People often compare the city's real estate with Hyderabad's in early 2000. Many land owners turned millionaires in Hyderbad during that period.

Prices of land parcels in and around this small city, situated on the banks of river Krishna, have already appreciated by 25 per cent last year. This is expected to go higher.

Visakhapatnam

Though it is not the designated capital of newly divided Seemandhra, Visakhapatnam, also known as Vizag, is all set to be the focus of the state government to become the next IT hub. The real estate is expected to pick up and follow this development.

Currently, Visakhapatnam's real estate has few high-rises and a regular 2BHK apartment costs around Rs 30 lakh. It is, however, a much better place for land- parcel purchases in promising areas.

(Katya Naidu has been working as a business journalist for the last nine years, and has covered beats across banking, pharma, healthcare, telecom, technology, power, infrastructure, shipping and commodities)