Kochi top real estate destination in Tier II cities

New Delhi: Kochi has topped the list of best real estate destinations among 19 Tier-II cities in India on the back of robust housing demand and better project execution, according to a report.

The study by PropEquity also found that the total market size of the 19 tier II cities in terms of annual sales stood at Rs 32,600 crore, which is 20 per cent of the total market size of 14 tier I cities.

Gurgaon-based PropEquity, an online subscription based real estate data and analytics platform, said the rankings are based on 10 key parameters including price, supply, sales, unsold inventory, and new launch trends. The study has looked at execution delays and the size of the market in value terms.

On the list, Nashik ranks second, followed by Vishakapatnam, Vadodra, Trivandrum, Jaipur, Mangalore, Indore, Goa and Coimbatore.

The bottom four cities in the list are Agra, Lucknow, Bhiwadi and Mohali are from the Northern region.

Kochi bags the top positions because of its superior connectivity, economic activity, project delivery track record and low inventory, the report said, adding that the city also witnessed highest absorption in new launches.

"In top 10 cities, six are from south India as this region is end-user market. The developers in souther region are focusing on construction and delivery. Supply-demand mismatch and delays are much lesser," PropEquity MD and Founder Samir Jasuja told reporters here.

He also said that although Tier II-III cities performed better, they too have been adversely affected due to current slowdown, which has severely impacted the tier I cities.

Housing sales in the 19 tier II cities fell by 17 percent as against a 32 percent decline in the top 14 Tier I cities in the last two years.

"On the other hand, the launch prices of tier II cities increased at an annual rate of 9 percent compared to 10 percent for Tier I cities," the report said.

Southern cities have proven to be resilient, and their conservative nature in even better times actually has helped them sustain traction in the troubled times that the industry is going through, it added.

On market size, Jasuja said: "Size of the 19 tier II cities put together is 20 percent of the total size of the top 14 tier I cities".