Reverse Migration may fuel housing property demand in Tier-2, Tier-3 cities post-COVID-19 pandemic

Coronavirus Impact: Indian real estate is bracing itself for a very new post-COVID-19 world. One significant trend may be reverse migration spurring housing demand in Tier-2 and Tier-3 cities. According to the industry insiders, currently around 30 per cent of the net housing demand comes from Tier-2 and Tier-3 cities, but after the reverse migration of skilled and non-skilled labourers, may change the dynamics post-COVID-19 pandemic.

Speaking on the matter Anuj Puri, Chairman at ANAROCK Property Consultants said, “Reverse migration is already very visible among migrant labourers, and this trend can further percolate to skilled professionals who have been or may be off-rostered. Smaller towns and cities would consequently see a spurt in housing demand. 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 amidst dwindling job prospects, particularly in the US and European nations which account for nearly 70 per cent 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 employment for reverse-migrating Indians in smaller cities may prove to be challenging."

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Pointing towards the business coming in into the real estate sector in Tier-2 and Tier-3 cities; Pradeep Aggarwal, Chairman, ASSOCHAM – National Council on Real estate, Housing & Urban Development said, "The increasing reverse migration to Tier II and Tier III cities due to the lockdown and dwindling job prospects in metros will present affordable housing as the most attractive option for living. The buyers can think about buying these properties and not just renting it due to its affordable price range coupled with series of amenities offered.  NRIs returning to India will also be staying here, till the time international travel becomes safer. The new residential segment coming up in these small towns is likely to garner considerable interest from them due to the essential and advanced lifestyle requirements these projects will offer."

Mohit Goel, CEO at Omaxe said, "With reverse migration, the rise in demand of homes in the post-COVID-19 scenario is likely to be seen in integrated townships due to the controlled living environment they offer to its residents. Reasonable land prices, scarcity of organized living options and migration of working professionals etc are some of the reasons that could reignite demand in cities like Lucknow, Chandigarh, Ludhiana, Indore etc. With home loan interest rates at their historic low and government subsidy to home buyers, the acceleration in demand seems certain."