Sep 2019 , by , in Property Talk

Smaller metropolitan areas situated nearby but independent of the large metro cities are where youngest homebuyers are moving, booming the local economies and home values in those markets.


Increasingly high property rates in Tier-I cities along with burgeoning tech sector in Tier-II & III cities, have today’s young homebuyers moving to smaller cities. And, as long as property prices remain in control and infrastructure keeps improving, the new satellite zone will keep seeing an uptick in investments from millennial homebuyers.

But, how effective have been the new towns in solving the housing problem? One of the main reasons is the inability of the satellite towns to generate the strong economic pull. However, if planned properly the satellite cities hold huge potential to bring down the gap in the demand and supply of housing.

In fact, backed by better planning, lower prices and growing connectivity, both commercial and residential real-estate, in areas such as Sonipat in Delhi NCR, Nagpur near Mumbai, Hi-Tech City adjacent to Hyderabad and New Town near Kolkata are gaining popularity.


What has propelled the interest of developers and buyers alike in smaller cities is the growing connectivity with main city via Metro networks and the construction of freeways. Additionally, saturation and sky-high prices in major cities is driving both businesses and home buyers to explore the adjacent satellite cities for commercial and residential properties. Many foreign developers and investors too are picking up stakes in Greenfield investments in these locations.

Unlike a suburb, satellite cities are independent and self-contained. With the emergence of warehousing sector and proposed industrial corridors, we will see more satellite zone emerging across the country. Slowly and steadily, satellite cities have gained prominence across the country.


Cities near Delhi metropolitan city such as Gurgaon, Noida, Faridabad, and Ghaziabad now offer a range of office complexes, besides, residential spaces. Sonipat has emerged as the education hub and affordable housing haven.

Satellite cities of Mumbai like Navi Mumbai, Dombivli and Thane with great connectivity to the other parts of the state offer abundant housing and business property opportunities. Nagpur is set to become MIHAN SEZ hub with the upcoming Nagpur Metro and Outer Ring Road project.

The hub of Information Technology, Hi-Tech City of Hyderabad is in the same league. The technology township, spread over an area of 30 acres offers lavish residential and commercial spaces for end-users and investors.

Likewise, New Town along the eastern fringes of Kolkata is diverting the businesses from traditional CBD areas, supported by infrastructure development. The city is pulling in a great deal of real estate investments, especially in the commercial segment.

It’s a false notion that only the cities with IT hubs attract homebuyers. There are many satellite cities in the country that are favoured for residential investment, driven by different economic activities such as automobile industry, higher education sector or even tourism.


While metro cities might be the first thought for locations for any business, the satellite cities are claiming their place in the sun, now bequeathed with air, road and rail connectivity and better city infrastructure and liability quotient than saturated metro cities. Logistics and warehousing segment, healthcare, manufacturing industries are creating townships here. In addition, many of these satellite towns are on the Smart Cities list and are developing modern transport infrastructure, to vie as the commercial centre of the state.

No wonder, the real estate developers are now flocking to smaller cities to diversify their portfolios in emerging asset classes like co-living in IT hubs, student housing in education centres and warehousing in industrial townships. The modest land prices also make residential property development viable for developers. Given the increasing middle income group in these cities with growing purchasing power, the demand outweighs supply in these cities.


The new urban scenario clearly suggests that the development and investment towards the small and medium towns will release the pressure from the present few metro and Tier-I cities. Implementing development policies, creating well-designed townships and affordable housing for masses through sound public-private partnership models, and encouraging can go a long way in making our satellite cities a winning bet.

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