India’s thriving economy extends beyond its metropolitan hubs to its Tier-3 cities. These locales, though smaller in scale, are significant contributors to the nation’s growth and expansion. The Indian city tier classification system is primarily based on population size. Tier-1 cities include metropolitans like Mumbai, Delhi, and Bangalore, boasting high population density and rapid urbanisation. Tier-2 cities, such as Jaipur, Lucknow, etc., have made substantial strides in infrastructural development, leading to a boom in economic activities. Lastly, Tier-3 cities, which include towns like Shimla or Dehradun, have smaller populations. However, with increasing digital literacy and improving infrastructure, these cities hold immense potential for future growth. This article aims to provide a list and brief insight into the Tier-3 cities in India. These cities, often overlooked in favour of their larger counterparts, play a crucial role in the country’s socio-economic fabric.
See also: Metropolitan cities in India
What are Tier-3 cities in India?
Tier-3 cities in India are essentially smaller, and less-populated urban regions. They are often the last tier in the categorisation of Indian cities. They include cities like Kanpur, Dehradun, Gwalior, etc. These cities are rapidly developing yet lack the hustle and modern facilities of the metropolitans. They offer lower living costs than Tier-1 and Tier-2 cities. These cities are often the target for future development projects and have a high potential for economic growth. However, Tier-3 cities also face challenges like inadequate infrastructure and limited job opportunities.
Number of Tier-3 cities in India
India is a home to a multitude of Tier-3 cities, which play a significant role in the country’s socio-economic development. While there is no definite count, there are hundreds of these cities across 28 states and eight Union Territories.
List of Tier-3 cities in India
Here is a list of some of the Tier-3 cities in India:
- Etawah
- Roorkee
- Rajahmundry
- Bhatinda
- Hajipur
- Kanpur
- Dehradun
- Gwalior
- Rohtak
- Gandhinagar
- Udaipur
- Nashik
- Nagpur
- Mangalore
- Kochi
- Madurai
- Mathura
- Shimla
Real estate trends in Tier-3 cities in India
India’s real estate sector has seen a noteworthy shift, especially in Tier-3 cities. The traditionally underdeveloped real estate markets are now catching up with the larger metros, courtesy of the booming IT sector, improved infrastructure, and increased connectivity. These cities have become the new attraction for real estate developers and investors. Affordable housing is the primary driver in these markets. The Indian government’s aim to provide ‘Housing for All’ has given a significant boost to the real estate sector in Tier-3 cities. Builders are increasingly offering low-cost housing options, making it possible for more residents to own homes.
Another emerging trend is the increasing number of NRIs investing in these cities. Improved infrastructure and promising rate of return on investments are attracting them. Furthermore, the Smart Cities Mission by the Government of India to develop 100 cities across the country has also led to a rise in real estate activities in these areas. Growing job opportunities in sectors, such as IT and e-Commerce are leading to increased migration to these cities. This, in turn, is fuelling rental housing demand.
Another noteworthy trend is the focus on sustainable and green buildings. Developers are integrating green building principles to minimise the environmental impact. All in all, the future of real estate in Tier-3 cities looks promising. The contribution of these cities to the overall real estate sector is set to increase. However, these markets need systematic development and regulatory oversight to ensure balanced growth and avoid the pitfalls experienced by larger cities.
Living in Tier-3 cities in India
Living in Tier-3 cities in India embodies a unique charm and simplistic lifestyle, vastly different from the bustling life of metropolitan cities. These smaller cities, often overlooked in the broader panorama, offer a liveable ambience with less pressure, minimal crowd, and a slower pace of life. The cost of living is relatively low when compared to metro cities, thus providing an economically viable option for many. These cities offer a sense of community that is often lost in the hustle and bustle of larger cities. Here, cultural traditions are valued, and social bonds are stronger. The close-knit community makes it a safe environment, especially for families with children and elderly. This nurturing environment, where neighbours often feel like extended family, adds a wholesome touch to everyday life.
The basic amenities, such as healthcare, education, transportation, and entertainment are available, albeit not as developed or advanced as in Tier-1 or Tier-2 cities. Yet, the peaceful lifestyle coupled with modern amenities makes these cities an ideal place for retirement. Over the years, with government initiatives and digital revolution, Tier-3 cities are showing a promising growth in infrastructure and connectivity. However, just like any other city, living in Tier-3 cities comes with its share of challenges. Limited job opportunities often lead to migration to bigger cities. But, with the rise of remote work and online businesses, this trend might change in future. Overall, life in Tier-3 cities in India is a blend of simplicity, affordability and community living, creating a charming and peaceful lifestyle away from the chaos of metropolitan cities.
Benefits of buying a home in Tier-3 cities in India
Purchasing a home in a Tier-3 city in India can offer several advantages, especially for those looking for more affordable living options and less crowded environments. Here are some of the key benefits:
- Affordability: One of the most significant advantages of buying a home in Tier-3 cities is the cost. Property prices are considerably lower than in major metropolitan areas, making homeownership more accessible to a broader range of buyers. This affordability extends to both property prices and general living costs, including utilities, groceries, and services.
- Lower competition in real estate: Tier-3 cities typically have fewer buyers in the real estate market, which can result in less competition when looking for a property. This means you may have better chances of negotiating lower prices and getting more value for your money compared to fast-paced markets in bigger cities.
- Quieter and more peaceful environment: Tier-3 cities offer a more relaxed pace of life, with less congestion, noise, and pollution. For those looking for a peaceful environment away from the hustle and bustle of urban centers, these cities provide a welcome change, making them ideal for families or retirees.
- Good infrastructure and development potential: Many Tier-3 cities are witnessing rapid development in terms of infrastructure, with improved roads, public transport systems, healthcare facilities, and educational institutions. Additionally, government initiatives like Smart Cities Mission and Pradhan Mantri Awas Yojana (PMAY) are boosting the urban infrastructure of smaller cities, increasing their appeal to homebuyers.
- Appreciation in property value: While Tier-3 cities may not offer the immediate high returns seen in Tier-1 or Tier-2 cities, they present the potential for long-term appreciation. As these cities develop and grow in population, property values can rise steadily, offering a good investment opportunity over time.
- More space for the money: In Tier-3 cities, buyers can typically afford larger properties compared to Tier-1 cities. With more land available at lower prices, buyers can purchase homes with larger yards or more square footage, which is especially beneficial for those seeking a comfortable lifestyle with more personal space.
- Improved quality of life: Due to less overcrowding, Tier-3 cities often offer a higher quality of life, with better air quality, more green spaces, and a greater sense of community. Many residents find that living in these cities provides a healthier and more fulfilling lifestyle, away from the stress of metropolitan living.
Drawbacks of buying a home in Tier-3 cities in India
While buying a home in a Tier-3 city can be an attractive option for many, there are some potential drawbacks to consider. Here are the key disadvantages:
- Limited job opportunities: One of the biggest challenges in Tier-3 cities is the lack of job opportunities, particularly in specialized industries. These cities may not have the same level of employment options as larger cities, which can be a concern for people looking to advance their careers or for families dependent on well-paying jobs. Many residents may have to commute to bigger cities for work, which can lead to increased travel time and expenses.
- Underdeveloped infrastructure: Although many Tier-3 cities are undergoing development, they may still have limited infrastructure compared to larger urban centers. Public transportation systems, roads, and essential services such as healthcare and educational institutions might not be as advanced or easily accessible, which can be a drawback for families or those seeking convenience.
- Fewer amenities and services: Tier-3 cities may have fewer amenities such as malls, entertainment options, and high-quality restaurants compared to bigger cities. For those accustomed to the variety and convenience of metropolitan living, this could be a significant adjustment. Healthcare facilities may also be less equipped, and certain specialized treatments or services might not be easily available locally.
- Slower pace of economic growth: While Tier-3 cities are growing, their economic development may not match the pace of more established metropolitan areas. This slower growth could impact employment, income levels, and business opportunities. As a result, the overall standard of living might not improve as quickly as in larger cities.
- Limited social and cultural activities: Smaller cities often have fewer social and cultural activities, especially those centered around art, music, and entertainment. For individuals or families who enjoy a vibrant social scene, the relative quiet of Tier-3 cities may not provide the same cultural experiences that larger cities offer.
- Resale value challenges: The resale value of properties in Tier-3 cities may not appreciate as quickly as those in Tier-1 or Tier-2 cities. Due to slower economic development and fewer job opportunities, there may be fewer potential buyers when it comes time to sell your property. This could make it harder to recover your investment if you need to move or sell in the future.
- Limited connectivity: Although many Tier-3 cities are improving their infrastructure, they may still lack good connectivity to major cities or regions. Limited airports, fewer train routes, or poor road networks can make it difficult to travel for work or leisure, potentially isolating residents from the broader network of opportunities available in larger cities.
- Lower social services: While Tier-3 cities are developing, they may still have less advanced social services such as support for the elderly, child care facilities, or mental health services. This could be an issue for families with specific needs or those looking for a more comprehensive network of social support systems.
Housing.com POV
Tier-3 cities in India, though smaller and less developed compared to their metropolitan counterparts, hold significant promise for growth and development. These cities offer numerous advantages, such as affordability, quieter living environments, and a higher quality of life. They are witnessing steady improvements in infrastructure, real estate development, and connectivity, making them attractive destinations for potential homebuyers and investors. However, challenges like limited job opportunities, underdeveloped infrastructure, and fewer amenities need to be considered before making the move. With the right investments and government support, these cities could become thriving hubs of growth in the near future, offering a balanced and fulfilling lifestyle for residents.Â
FAQs
What are Tier-3 cities in India?
Tier-3 cities in India are the ones with slower industrial growth compared to Tier-1 and Tier-2 cities. These cities include places like Gwalior, Ranchi, Kochi, etc.
What is the difference between Tier-1, Tier-2 and Tier-3 cities?
The classification of Indian cities into Tiers is based on the population, industrialisation, and overall development. Tier-1 cities are the most developed and populated cities like Mumbai, Delhi, and Bangalore. Tier-2 cities are mid-level cities in terms of development like Agra, Jaipur, etc. Tier-3 cities are still developing and have a lesser population density.
What are the advantages of living in Tier-3 cities?
Some advantages of living in Tier-3 cities include lower cost of living, less congestion, closer to nature and more relaxed lifestyle.
How many Tier-3 cities are there in India?
While there is no exact number, it is estimated that there are over 100 Tier-3 cities in India.
Are there any major industries in Tier-3 cities?
While Tier-3 cities are not the industrial hubs, they do house several small and medium scale industries that contribute to local economies. These industries range from manufacturing to services.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
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