Tier 2 Cities Shine with Affordable Housing, Easing EMI Burden for Homebuyers

The affordable housing crisis is beginning to hit metro cities while Tier 2 cities also experienced notable economic enhancements and improvements in quality of life of homeowners, based on the Home First Finance survey.

The survey noted the added improvements in smaller cities were attributable to lower living expenses, access to opportunities for local jobs, and income from family-run businesses. Affordable construction in Tier 2 cities has made it far easier for families to manage their EMIs with affordable living and without alters the life of homeowners when compared to Tier 1 metros, where affordability is continuously declined and families seem to be sinking under an increasing burden of financial strain.

• Tier 2 Cities Offer Affordable Housing, Boosting Income & Savings
• Metro Buyers Face Rising Costs, While Tier 2 Cities Ease EMI Burden
• Affordable Homes in Tier 2 Cities Drive Financial Relief & Lifestyle Improvement

However, based on the responses of 280 households from all over India, the study found that the high costs of living and smaller disposable incomes in the metro cities afforded little opportunity for enhanced quality of living to be emphasized in comparison to the financial independence afforded to homeownership.

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Of the 31 families that indicated increased financial pressures and family responsibilities, 58 percent were from Tier1. It was strikingly dissimilar on the homeownership experience and financial pressures across urban India.

The survey found that at least 50 percent of citizens in Tier 2 cities reported an increase in household income after buying a new home, with 56 percent also reporting an increase in savings. The report identified the main factors for these increases as lower cost of living, access to local job opportunities, and additional income from small family businesses. The report pointed out affordable housing alternatives in smaller cities also helped families manage their EMIs with little impact on their lifestyle overall.

"These buyers struggled with rising EMIs, high living expenses, and maintenance costs. For many, the pressure of mortgage repayments offset potential savings, resulting in tighter household budgets and limited disposable income," the report said.

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“Yes, there is a lot of mental calmness that my family and I feel now, what else does one need in life?" one of the surveyors living in a Tier 2 city said.