How Smart City tag is building new ground for real estate investment in Tier-2, Tier-3 cities
The 'Smart City' tag allotted to several smaller towns and cities itself opened up opportunities in their respective real estate markets.
On account of the smart city tag, the real estate investors have started to invest in the Tier-2 and Tier-3 cities-based real estate projects. Investors are also aware that more and more private equity (PE) investors have been turning their focus on Tier-2 & Tier-3 cities in the last four years. As per ANAROCK’s latest PE report, Private Equity in Indian Real Estate between 2015-2018, nearly $1.37 bn were pumped into real estate markets across various smaller cities, including Bhubaneshwar, Chandigarh, Ahmedabad, Mohali, Indore and Amritsar.
Speaking on the development Anuj Puri, Chairman – ANAROCK Property Consultants told Zee Business online, "In the initial leg of this Government-driven mission, the 'Smart City' tag allotted to several smaller towns and cities itself opened up opportunities in their respective real estate markets, with housing sales seeing some traction even during the lull period." Anuj Puri further added, "As per the ANAROCK data, Lucknow saw overall housing sales rise by 19 per cent in 2018 against the previous year. Ongoing infrastructure developments including Metro deployment increased connectivity to the national capital via Agra Expressway, and huge employment-driven inward migration from nearby smaller towns and villages boosted Lucknow's housing market considerably." He said that nearly $1.37 bn were pumped into real estate markets across various smaller cities by the PE investors that include Bhubaneshwar, Chandigarh, Ahmedabad, Mohali, Indore and Amritsar.
Standing in sync with ANAROCK views Rakesh Yadav, CME, Antriksh India Group said, "A conducive reform-driven market environment and government sops have breathed life to Indian real estate. Long-term investors with realistic returns expectations are returning." Rakesh Yadav of Antriksh India Group said that recent interim budget offered major benefits to property investors, such as increased TDS threshold on rental income from Rs 1.8 lakh to Rs 2.4 lakh and the benefit of rolling capital gains tax from investment in one house over to two new houses. Property investment with a focus on rental income is once again being seen as lucrative. He went on to add that RERA implementation and lower GST rates immensely helped revive consumer faith in new launch properties.
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