The Coimbatore realty market's growth momentum is next only to that of Chennai and Hyderabad in the South, and ahead of other tier-two cities in the region, according to a senior executive of HDFC Ltd, the market leader in home loan lending.

At its three-day property show ‘Namma Veedu', which began on Thursday, the company expects to generate at least 50 per cent more business volume compared to last year's edition.

More than 25 developers are participating this year. Mr Mathew Joseph, Senior General Manager and Regional Business Head, Tamil Nadu and Andhra Pradesh, HDFC, Chennai, told Business Line that in metros or A-grade cities across the country, housing demand has plateaued due to reasons such as investors turning cautious, rising interest rates, and pricing pressure. But tier-two cities like Coimbatore presented a different picture, with the prices remaining firm.

He said the smaller cities are also witnessing a boom in industrial development, and with more people arriving on jobs the housing demand has remained stable. Moreover, as the demand was driven not by ‘investors' but actual end-users, home prices remained steady without any sudden spike or fall.

Mr Joseph said this was beneficial to lenders too, as actual users ensure a stable business environment by servicing their loans for a longer period unlike investors, who enter and exit the property market driven by profit calculations.

Mr S. Ramesh Kumar, DGM and Business Head-Southern Tamil Nadu, HDFC, Coimbatore, said around 7,000 apartments, villas and bungalows priced from Rs 20 lakh to almost Rs 3 crore were on offer at the show.

Declining to specify the business anticipated, he said the show was likely to generate at least 30-40 per cent more business than last year.

Mr Joseph said the Coimbatore housing market offered the highest business potential for HDFC after Chennai and Hyderabad in his jurisdiction. The city accounted for a 20 per cent growth in home loan demand, closely followed by Kochi.

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