It is not only the big metros that are receiving the push from organised real estate developers. India's real estate sector is witnessing a major shift as developers are turning their attention to Tier 2 and Tier 3 cities, signalling a new era of growth and opportunity. In 2024, these emerging urban centres accounted for an impressive 44 per cent of the 3,294 acres of land acquired by developers, underscoring their rising prominence in the country's property market. This trend reflects a strategic move by developers to cater to the growing demand for housing beyond traditional metropolitan hubs.
A recent report by CREDAI-Liases Foras revealed that housing sales across 60 cities reached an impressive 6,81,138 units in 2024, marking a robust 20 per cent year-on-year growth. Notably, the luxury and ultra-luxury segments dominated the market, contributing to 71 per cent of total sales value. This surge in high-end property transactions highlights a shift in buyer preferences toward premium living spaces, driven by rising incomes and aspirations.
Take the case of Ahmedabad which is a rapidly growing economic hub and is witnessing steady real estate expansion, supported by strong infrastructure and increasing investor interest. Ranked 3rd in the Ease of Living Index, the city has recorded a 3.3 per cent CAGR in housing prices.
Surprisingly sales are highest in the Ultra Luxury Segment (Rs 2 Cr – Rs 5 Cr) with 14,352 units, followed by the Luxury Segment (Rs 1 Cr – Rs 1.5 Cr) with 10,896 units and Rs 1.5 Cr – Rs 2 Cr with 10,034 units, reflecting strong demand in high-value properties.
In a similar trend Surat, a rapidly growing Tier-2 city, is emerging as a major industrial and real estate hub, driven by its strong textile and diamond industries. The city has recorded a per cent CAGR in housing prices, reflecting steady market expansion.
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Sales were highest in the Rs 40L – Rs 50L segment with 3,356 units, followed by Rs 50L – Rs 75L with 3,058 units and Rs 30L – Rs 40L with 2,674 units, showing steady demand across price segments in the city.
Tier 2 cities such as Indore, are experiencing rapid real estate growth, driven by economic expansion, IT development, and smart city initiatives. It witnessed a 7.5 per cent CAGR in housing prices. Sales were highest in the Rs 10L – Rs 30L segment with 6,571 units, followed by Rs 30L – Rs 40L with 4,403 units and Rs 50L – Rs 75L with 3,446 units, showed demand across multiple price points.
Chandigarh, a well-planned Tier-2 city, is also experiencing real estate growth due to modern infrastructure, strong connectivity, and a thriving commercial sector. The city has recorded a 5.8 per cent CAGR in housing prices. Sales are highest in the Rs 1.5Cr – Rs 2Cr segment with 1,854 units, followed by Rs 50L – Rs 75L with 1,402 units and Rs 5Cr – Rs 10Cr with 997 units, reflecting strong demand in premium housing in the city.
In the eastern part of the country, Bhubaneswar is experiencing strong housing and infrastructure expansion, which is supported by IT and industrial growth. The city has a 4.2 per cent CAGR in housing prices, demonstrating positive real estate momentum. Sales were highest in the Rs 1.5Cr – Rs 2Cr segment with 1,056 units, followed by Rs 2Cr – Rs 5Cr with 942 units and Rs 1Cr – Rs 1.5Cr with 860 units, reflecting demand for high-value properties.
Other cities such as Jaipur, Coimbatore, Vadodara, Nagpur, Goa, Nashik, Bhopal, Rajkot, Patna etc also witnessed very strong real estate momentum.
“From the past few years, developers, investors, and buyers have been increasingly drawn to Tier 2 and Tier 3 cities for their better quality of life and beautiful environment. These cities are emerging as real estate hotspots, offering immense growth potential and housing options. The shift towards these cities is not just about investment; it’s about creating communities that blend modern living with natural charm, making them the future of India’s real estate landscape,” S.K. Narvar, Group Chairman, Trident Realty.
