Reverse migration to spur housing demand in Tier 2 & 3 cities
Reverse migration can spur housing demand in Tier 2 & 3 cities postCOVID-19. Lucknow, Indore, Chandigarh, Kochi, Coimbatore, Jaipur and Ahmedabad are likely to see reverse migration from offrostered urban professionals. NRIs looking to return to India amid dwindling job prospects — particularly from the US and the Europe (nearly 70% global cases).
Currently, top 7 cities account for almost 70% residential market; remaining 30% in Tier 2 & 3 cities. Social distancing norms are expected to increase per capita office space allocations (reduced from 100-125 sq ft in the last decade to 75-100 sq ft pre-COVID-19.
ANAROCK in its report titled ‘India Real Estate: A Different World Post COVID-19’ said the realty sector is bracing itself for a very new post-COVID-19 world. One significant trend may be reverse migration spurring housing demand in Tier 2 & 3 cities,” says the ANAROCK report.
Currently, the top 7 cities account for almost 70% of India’s residential market, with the remaining 30% accounted for in Tier 2 & 3 cities. This ratio may well change in times to come.
“Cities like Lucknow, Indore, Chandigarh, Kochi, Coimbatore,
Jaipur and Ahmedabad would be the main beneficiaries of the reverse migration of professionals who have lost their jobs in the metros, or are likely to. These returnees will benefit from the cost of living and superior infrastructure that many Tier 2 and Tier 3 provide,” said Anuj Puri, Chairman, ANAROCK Property Consultants. He added primary demand may skew towards rental housing — purchase demand would initially come from local investors keen to meet the rental demand. Many NRIs will also return to India amid dwindling job prospects, particularly in the US and European nations which account for nearly 70% global cases. For them, the top 7 cities would be the best options but many will consider smaller cities where they can be close to their families. Finding suitable job for reverse-migrating Indians in smaller cities may prove challenging.”