India has seen an unprecedented real estate boom in recent years, but never more so than in 2007.
With real estate prices in the metros soaring, developers are now looking at greener pastures in tier II and tier III cities like Chandigarh, Bhubaneswar, Kochi, Ahmedabad, Nagpur and Mysore.
"The focus is now on other closer-to-Delhi cities of Haryana as the development policies there are very conducive for real estate development. For around Rs 20 lakh, a middle class person can get a luxury apartment," real estate developer Sunil Anand earlier told rediff.com
These emerging growth centres are characterised by low real estate costs, availability of land for development and untapped manpower pool. 'Anticipating the latent demand in these markets, a number of real estate developers and retailers have chalked out expansive plans to harness the opportunity,' states a Knight Frank report.
A number of micro and macro factors like sustaining GDP growth, expanding the service sector, rising purchasing power and affluence are also aiding realty development in Tier II cities.
Realty is spreading its tentacles to smaller towns, thanks to the IT/ITES (Information Technology Enabled Services) sector as well. Considering that IT/ITES contributes nearly 80% of total office space in smaller cities, this sector has been the main demand driver in these cities, the Knight Frank report adds.
Thanks to the real estate growth in small cities, India's realty sector is growing at a scorching 30% and is estimated to touch $60 billion by 2010. The sector has caught the fancy of global realtors and investors from several international developers, primarily from West Asia, South-East Asia and Europe.
Image: The Parsodi Infotech Park in Nagpur. Real estate in smaller cities like Nagpur are booming in India
Also read: India's smaller cities are booming
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