In our Country, Metro or the Tier-1 Cities have witnessed a rapid rise in property costs fuelled by rise in demand and factors discussed in the previous blog ( Country, Realty ……) over the last couple of decades. The growth has outpaced creation of affordable housing for the masses.
This has resulted in spilling of the demand for such projects delivering affordable and sound housing to the outskirts of the Metros and to the Tier 2 and Tier 3 cities. And has been able to satisfy the need of sound housing in terms of value for money and also quality of life, in comparison to bigger Tier 1 cities.
Classification of cities is based upon the current population and demand for good housing, which in-turn has a direct impact upon the Rental costs prevalent in the Area. Therefore a method of HRA (House Rent Allowance) Classification is adopted in segregating cities for further analysis.
Under this HRA (House Rent Allowance) System, the division of Indian Cities is as follows;
Metro/ Tier-1 Cities- Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai, Pune.
Tier-2 Cities- Agra, Ajmer, Aligarh, Allahabad, Amravati, Amritsar, Asansol, Aurangabad, Bareilly, Belgaum, Bhavnagar, Bhiwandi, Bhopal, Bhubaneswar, Bikaner, Bokaro Steel City, Chandigarh, Coimbatore, Cuttack, Dehradun, Dhanbad, Durg-Bhilai Nagar, Durgapur, Erode, Faridabad, Firozabad, Ghaziabad, Gorakhpur, Gulbarga, Guntur, Gurgaon, Guwahati, Gwalior, Hubli-Dharwad, Indore, Jabalpur, Jaipur, Jalandhar, Jammu, Jamnagar, Jamshedpur, Jhansi, Jodhpur, Kannur, Kanpur, Kakinada, Kochi, Kottayam, Kolhapur, Kollam, Kota, Kozhikode, Lucknow, Ludhiana, Madurai, Malappuram, Malegaon, Mangalore, Meerut, Moradabad, Mysore, Nagpur, Nashik, Nellore, Noida, Patna, Pondicherry, Raipur, Rajkot, Rajahmundry, Ranchi, Rourkela, Salem, Sangli, Siliguri, Solapur, Srinagar, Surat, Thiruvananthapuram, Palakkad, Thrissur, Tiruchirappalli, Tiruppur, Tirupati, Ujjain, Vadodara, Varanasi, Vasai-Virar City, Vijayawada, Visakhapatnam, Warangal.
Tier- 3 Cities All other urban centres.
Realty in Tier-2 Cities, has seen a very healthy growth. Land Costs are affordable, which is attractive for major builders to start Residential and Commercial Projects here. Also, the ever continuing trend of people migrating from villages to tier-2 cities for employment and livelihood, very much ensures a good demand supply ratio. It would now be very interesting to note that such cities have also been major Industrial centres or very closely situated to some major Pilgrimage/ Tourist destinations as well (Analyse the examples of Tier-2 cities).
Do join me in my efforts to understand the ground realities, as I share them with you in a journal, as I discover them along. Share, if you found the above interesting!!
• “Recommendations of the Sixth Central Pay Commission – Decision of Government relating to grant of Dearness Allowance to Central Government servants” (PDF). Ministry of Finance Department of Expenditure. Retrieved 26 March 2014.
• “THE ALL INDIA SERVICES (HOUSE RENT ALLOWANCE) RULES,”. Chhattisgarh State Government. Retrieved 26 March 2014.