Know the RESIDEXThe Residex is a housing price index updated quarterly by National Housing Bank (NHB), the apex housing finance institution that falls under the Reserve Bank of India.NHB regulates the activities of housing finance companies across the country.The original Residex was launched in 2007 and covered 26 cities. In July 2017, the NHB released a revamped RESIDEX that now captures trends in 50 cities spread over 18 states and union territories.Did you ever think cities such as Bhubaneswar and Kanpur would feature on your list of possible real-estate investment destinations?The most recent National Housing Bank’s (NHB) Residex housing price index shows that small cities like these have witnessed big gains.The highest increases in prices of residential properties for the quarter ending March 2017, over the previous quarter, were observed in Bhubaneshwar (11.7%), Visakhapatnam (10.9%), Raipur (10%), Kanpur (8.1%), Gurgaon (6.7%), Chandigarh (6.2%), Coimbatore (4.9%), Mumbai (3.7%), Vadodara (3.7%) and Chakan (3.7%), according to the residex data.Metros Delhi, Chennai and Bengaluru didn’t make it to the top 10. Prices in Bengaluru went up by less than 1% and in Chennai by 1.5%. In Ahmedabad, according to the data, prices remained the same. Delhi, Kolkata and Greater Noida reportedly saw a decline.“For price-sensitive buyers, right now is the ideal entry point to purchase in certain Tier-2 and Tier-3 cities,” says Anuj Puri, chairman at realty advisory Anarock Property Consultants. “Think beyond Delhi, Mumbai, Bengaluru. Infrastructure development is pushing real-estate growth in small cities, leaving you spoilt for choice.”After demonetisation, there has been movement in unexpected markets, adds Sriram Kalyanaraman, managing director at NHB, the apex housing finance institution that falls under the Reserve Bank of India.Developers say part of this trend towards smaller cities is a result of metros and major cities witnessing a saturation in construction opportunities and economic growth.“Realty firms and IT companies moving to smaller cities too,” says Aniket Haware, managing director at Haware Builders.Puri adds that this is good news for realty nationwide. “This will eventually result in a more uniform spread of realty demand across the country and may also help reduce the pressure on larger cities,” he adds.Trend talkA big reason for the growing price index in the smaller cities is a virtuous cycle of low price bands, greater demand, quicker appreciation.The cycle goes even further back, says Puri, with lower land prices encouraging developers to focus on affordable housing projects, which is also the price band most likely to sell.“Many of these cities are also seeing significant infrastructure development, with that bringing the promise of even greater appreciation,” Puri says.For large-scale builders, this is therefore the time to move in. “The rising demand and comparatively low penetration in these towns means that competition is not as severe as in the larger cities,” says Amit Wadhwani, director of construction firm Sai Estate Consultants.Some big players with adequate capital and wide networks are already cashing in on the opportunity.Poddar Housing and Development plans to expand to four Tier-2 and Tier-3 cities over the next year. “There’s an oversupply in the metros, the market is slow and, for a revival, we are considering exploring smaller markets,” says managing director Rohit Poddar.For those looking to buy, rental values and expected employment growth are key indicators of a city’s future real-estate potential.“These factors help determine capital appreciation trends,” says Puri.