With real estate prices in the NCR region soaring, developers are looking at greener pastures in tier II and tier III cities: infact, the boom has just begun in Kundli, Sonepat, Panipat in Haryana and Rudrapur in Uttaranchal, where luxury apartments, affordable even by the middle class, are fast coming up.
"All roads today lead to tier II and tier III cities that are around two to three hours drive from Delhi where these luxury apartments are coming up," says Kashif N Usmani of Taneja Developers and Infrastructure Ltd.
"The last decade saw the transition of sleepy towns like Gurgaon, Noida and Faridabad into enviable addresses. But today, these tier I towns, as they are called, are all saturated and far beyond the means of the middle class," he says.
"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," says Sunil Anand of Anand Properties & Infrastructure Ltd.
The catch is that these apartments come with a luxury tag. A 2-3-bedroom apartment comes with attached state of the art baths, modular kitchens and wooden flooring in the master bedroom. "If this is not enough to lure the buyer, there is also a fountain at the entrance," says Anand.
Many big names in the real estate industry have entered the fray: TDI is coming up with what it calls a 'Self Integrated City' in Kundli, while Omaxe too is building self-integrated townships. All these are coming up with not only luxury apartments but also schools, gyms, parks, golf courses, community centres and posh clubs.
Manmeet R. Singh of Omaxe says, "The apartments are very reasonably priced. We are giving them the best of luxury living at giveaway prices."
"Tier II and III cities are far more favourable in terms of affordability. At 20 to 30 lakh they are getting high rise apartments which in the city will cost them more than 60-70 lakh," says Partho Kunar of Alliance Nirman.
Citing the case of Rudrapur in Uttaranchal, he says industry giants have invested Rs 10,000 crore (Rs 100 billion) in the area. These townships would be self-sustaining.
It is not just luxury that is attracting the buyers. "There are plans to bring the Delhi Metro to Kundli and Sonepat in another two years time and this will only add to the comfort of the people," says Usmani.
The development of infrastructure around the Tier II and III cities is one of the main reasons that the buyers are flocking to these townships, he says.
The tier II cities have become the favourite haunt for ITES industry too. These cities provide a cost benefit in terms of low rent and low cost of living. And as the BPO industry starts moving base to these cities, they are sure to become commercial hubs.
The opening of a mall in Panipat this month seems just the beginning, says Anand.
However, not all tier II cities are for the middle class. There has been a growing demand among the NRIs for a second home in places like Rishikesh. This no doubt has pushed up the price of such projects. Here even studio apartments (with one bedroom) can cost some 30-40 lakh, says Anand.
Kumar, meanwhile, rubbishes claims that the real estate bubble would soon burst. "It will not burst but settle down. From Kundli and Rudrapur, it would only spread further, once the saturation reaches these areas," he says
