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Virtual housing demand grows in tier 2, 3 cities: Report
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SME Times News Bureau | 30 Sep, 2020
Online enquiries and virtual demand for housing units is gaining
momentum in the tier 2 and tier 3 cities post the nationwide lockdown,
according to a report by Housing.com.
The report titled "Time for
Internal Globalisation - Small Cities Setting the Tone for Revival"
noted a surge in virtual residential demand from 'shadow cities' (Tier 2
and 3 cities). The recently launched Virtual Residential Demand Index
states that the demand from small cities had been increasing steadily
but saw a significant spike in August 2020.
Overshadowing the
metros, the index jumped to 210 points for 'shadow cities' compared to
150 for the metros post the nation entering into Unlock Phase 4.0
"Reverse
migration of the corporate workforce and increased flexibility due to
remote working is one of the key drivers cited for this surge in virtual
residential demand," the report said.
It noted that, though
development in tier 2 and 3 has moved at a snail's pace, the current
pandemic driven crisis, has brought structural changes, which has
notably accelerated the process of deeper market penetration in 'shadow
cities' across sectors.
Driven by the thrust of increasing
digitisation, and an aspirational consumer cohort in the 'shadow
cities', these cities now are exhibiting a readiness for big brands
across the categories of fashion, luxury cars, jewellery and real estate
among many others, it said.
The disruption in the economy and
job uncertainty caused by the coronavirus pandemic led to a significant
'reverse migration' of the population --- both informal migrant
population and employees in the formal service sector who have either
lost their jobs or are working remotely.
"This reverse migration,
with workforce moving back to their hometowns or smaller cities is one
of the key drivers that is rallying the growth of not only the
e-commerce platforms but is also surging the online search traffic for
buying and renting residential spaces in the 'Shadow Cities'," the
report said.
"On our Housing.com platform during the last few
months, we have seen a noteworthy increase in interest levels for
residential properties especially from non-metro cities such as
Amritsar, Chandigarh, Vadodara, Nagpur, Vijayawada and Coimbatore," said
Dhruv Agarwala, Group CEO, Housing.com.
The 'Virtual Residential Demand Index' shows this trend more saliently post May 2020, he added.
As
per the report, the interest in the smaller cities has been gradually
increasing and the share increased to 27 per cent in the first half of
2020, as compared to 18 per cent in the same period in 2019.
Cities
such as Agra and Amritsar witnessed an impressive growth of more than
100 per cent in the virtual residential demand over pre-Covid times,
while cities of Vadodara, Ludhiana, Mangaluru, Chandigarh and Lucknow
saw more than 80 per cent growth in the residential demand in the same
period.
In contrast, the top eight cities have witnessed a
relatively lower growth in virtual demand for residential spaces over
the Pre-Covid period.
Agarwala said: "Reverse migration driven by
remote working could have "powerful reverberations" on the future of
residential demand."
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