India’s smaller property markets in tier II and III cities have been witnessing higher growth as against large metros. Around 50 districts of the country have exhibited higher Compounded Annual Growth Rate (CAGR) of outstanding home loans, ranging from 15% to 36% between financial year 2012-13 and 2017-18, as against 8% to 12% observed across districts of Delhi, Mumbai, Chennai and Kolkata, showed a JLL Research analysis of the latest RBI home loan data.During this period, India’s home loan market grew at CAGR of 16%, indicating healthy demand for housing.
"The home loan data demystifies the common perception that districts comprising the top leading cities, Mumbai, Delhi, Chennai and Kolkata, drive residential real estate growth. The data clearly indicates that with development focus gradually reaching to peripheral regions, tier II and III cities of the country have attracted the homebuyers’ interest," said Ramesh Nair, CEO & Country Head, JLL India.
The share of top four districts to the overall outstanding home loans in the country has dropped to 16% from 22% during the same period. In comparison to this, the share of rest of India has increased to 84% from 78%.
Factors such as improved connectivity, infrastructure growth, better education and health care facilities have supported the growth of peripheral cities.