Spiritual Hotspots and Emerging Cities Drive India's Real Estate Boom
Discover how spiritual tourism is transforming India's real estate market, with Tier II and III cities emerging as growth centres due to improved infrastructure, affordable living costs, and government initiatives.
Real EstateSpiritual TourismIndiaTier Ii CitiesTier Iii CitiesReal EstateJul 02, 2024
Spiritual tourism is a surprising driver of this growth, with nearly 60% of domestic tourists visiting spiritual destinations. This USD 60 billion industry is expected to reach USD 130 billion by 2032, reflecting a Compound Annual Growth Rate (CAGR) of 9-10%. Cities with famous temples, pilgrimage sites, and spiritual significance are experiencing a boom in tourism and related infrastructure development.
The report also highlights other factors impacting real estate in these emerging cities. The rise of remote and gig work is creating a demand for second homes and co-working spaces in offbeat destinations. India's rapidly growing e-commerce market, projected to reach USD 160 billion by 2028, is also influencing real estate demand. The need for warehouses and fulfilment centres is increasing, and Tier II and III cities are strategically positioned to serve this expanding online shopping market.
Additionally, India's rapid digitization is leading to the development of data centres in smaller cities like Bhopal, Cuttack, and Ranchi. This trend is driven by the need for reliable infrastructure to support a growing online population of over 75 crore internet users. As digital infrastructure improves, these cities are becoming hubs for data storage and processing.
Decentralised work models are also reshaping real estate dynamics. IT companies and startups are increasingly tapping into the talent pool in smaller cities, leading to a rise in demand for both commercial and residential real estate. The shift towards hybrid work models, with central offices in metros and operational hubs in smaller towns, is further supporting this trend, making smaller cities attractive for both businesses and residents.
The Colliers India report suggests that these 17 emerging cities will witness rapid real estate development in the coming years. This marks a significant shift in India's growth story, with smaller cities playing a more prominent role alongside traditional metropolises.
Frequently Asked Questions
What is driving the growth of Tier II and III cities in India?
Improved infrastructure, affordable living costs, and government initiatives are attracting businesses and residents to these cities.
How big is the spiritual tourism industry in India?
The industry is currently worth USD 60 billion and is expected to reach USD 130 billion by 2032, reflecting a CAGR of 9-10%.
What is the impact of e-commerce on real estate demand in Tier II and III cities?
The need for warehouses and fulfilment centres is increasing, driving significant growth in the logistics and warehousing sectors.
How is India's rapid digitization affecting real estate in smaller cities?
The development of data centres in smaller cities is driven by the need for reliable infrastructure to support a growing online population.
What is the impact of decentralised work models on real estate in Tier II and III cities?
The shift towards hybrid work models is driving demand for commercial and residential real estate in these cities.
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