The Impact of Reverse Migration on Tier-2 and Tier-3 Cities

 Coronavirus has had a severe impact on all employment sectors. From demand to sales to manufacture, everything has taken a dive now. Real estate is no different. As people have started moving from metropolitan cities back to their small towns. The whole picture of the real estate has changed. 2 BHK flats in Lucknow are the primary example of this transformation.

Due to reverse migration, there has been an increase in real estate properties in tier 2 and tier 3 cities. Below is a detail description of the causes and nature of this hike in demand:

The story by far depicts that tier- 1 cities, that is, the top seven cities in India held the highest number of real estate properties. Tier- 1 cities accounted for approximately 70% of sales in the real estate industry. The main reason behind such a high percentage was the large migration of people to tier-1 cities for the sake of employment.

But the Coronavirus pandemic has lowered the economy and augmented unemployment. Some people are losing their jobs while others are shifting to work- from- home. As a result, there is reverse migration. Herein people are turning back to their homes which, in most cases, happen to be in a tier- 2 or tier- 3 cities.

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The current phase of reverse migration hints at a surge in demand for homes and investment in real estate properties in tier-2 and tier- 3 cities. Most buyers are end-users, that is, they invest/ buy a house for their personal use. Lucknow, Coimbatore, Jaipur, Chandigarh, Kochi, Indore, and Ahmedabad are amongst those cities that will benefit in the real estate sector due to the changing scene of migration. Already there is a surge in 2 BHK flats in Lucknow.

An essential point- to- note here is that before the commencement of pandemic and reverse migration, the graph of real estate in tier 2 and tier 3 cities has already started improving. The reason amounts to the low economical cost of living. You see, in comparison to the metro cities, living in tier 2 and tier 3 cities are cheaper+ the property rates for buying a house is also lower. These cities offer affordable living.

Also, it is worth considering that nowadays 2 tier and 3 tier cities offer just as good infrastructure as a tier 1 city does. There has been an up-gradation in features. Take the 2 BHK flats in Lucknow, they are affordable as well as well built.

Are 2 tier and 3 tier cities Experiencing Growth?

One last factor that has led to an increase in real estate sales. This deals with 2 tier and 3 tier cities are the reverse migration of NRIs in this pandemic. Due to uncertain situations and economic dropdown across the globe, various NRIs are coming back to India. Not every NRI can buy a luxury house in a tier 1 city right away. Hence, they opt for residential units in tier 2 and tier 3 cities. 2 BHK flat in Lucknow is the foremost example here. They are good from every angle, be it hygiene, security, or modern amenities.

To conclude, the COVID- 19 pandemics has done something good for two-tier and three cities in India. Let us see how far these benefits go.