Tier II housing prices have surged up to 65% on average across several cities since 2023, according to a PropEquity report. This remarkable increase highlights the growing demand for real estate in these regions. Cities like Jaipur, Guntur, and Bhubaneshwar have emerged as strong contenders for driving the real estate boom, supported by better connectivity and affordable land.
Why tier II cities are gaining momentum
Several factors explain the rapid growth in Tier II housing prices. Firstly, affordable land availability has drawn developers to these cities. Additionally, the enhancement of infrastructure and urbanisation has made them attractive for premium and luxury housing projects.
Samir Jasuja, Founder and CEO of PropEquity, noted that Tier II cities are becoming growth hubs. These cities are now key to India’s development, offering economic opportunities and acting as employment centres.
Top cities with rising housing prices
Certain Tier II cities have experienced impressive growth in real estate prices:
- Jaipur saw the highest increase at 65%, with prices climbing from ₹4,240 to ₹6,979 per sq. ft.
- Guntur followed closely, with a 51% rise, reaching ₹5,169 per sq. ft.
- Bhubaneshwar recorded a 15% increase, reaching ₹7,731 per sq. ft.
Moreover, cities in northern India, like Agra (59%) and Chandigarh (34%), and western India, like Gandhinagar (19%), have also witnessed substantial price hikes.
Cities facing a decline in housing prices
Despite the overall positive trend, some Tier II cities have experienced price declines:
- Sonepat recorded the largest drop at 26%.
- Mysore and Trivandrum reported smaller decreases of 14% and 4%, respectively.
These exceptions underline the varied dynamics of the housing market in Tier II cities.
What the future holds for Tier II housing markets
The PropEquity report emphasises that Tier II cities will play a crucial role in shaping the future of India’s real estate. Improved connectivity, ongoing urbanisation, and increased interest from developers will likely fuel continued growth in these regions.
Interestingly, Goa has become the only Tier II city with weighted average launch prices exceeding ₹10,000 per sq. ft., reflecting its unique appeal.
With cities like Jaipur and Guntur leading the way, the potential for Tier II housing markets is immense. As more developers and homebuyers recognise these opportunities, the trend of rising prices is likely to persist.
This analysis highlights the dynamic growth of Tier II housing markets, underscoring their importance in India’s economic and urban development.
