Report by Liases Foras highlights a significant surge in the role of Tier 2 and 3 cities in shaping India’s real estate future, revealing that 44 per cent of the 3,294 acres of land acquired by developers in 2024 were concentrated in these emerging hubs. This marks a strong shift in investment focus, reflecting the potential of these cities in driving long-term sectoral growth.
Housing sales in 2024 reached 6,81,138 units across 60 cities, recording an impressive 23 per cent year-on-year increase. The primary builder’s market registered a sales value of Rs 7.5 trillion, reflecting a staggering 43 per cent YoY growth, propelled by sustained demand across segments. Luxury and ultra-luxury housing emerged as key drivers, contributing 71 per cent of the total sales value, driven by larger ticket sizes and a balanced supply-demand dynamic in premium markets.
Properties priced between Rs 1–2 crore saw a 52 per cent jump in sales, with 1,32,532 apartments sold, while the ultra-luxury segment (Rs 2 crore+) experienced an even steeper rise of 73 per cent, highlighting developers’ confidence in catering to high-net-worth buyers. With the real estate sector now valued at Rs 22.5 trillion and contributing 7.2 per cent to India’s GDP, it is evident that Tier 2 and 3 cities are becoming growth engines, offering both affordability and high-value transactions that redefine India’s urban narrative.
While metro cities continue to dominate luxury and premium housing sales, the rise of Tier 2 and 3 cities has introduced a more balanced market dynamic, where mid-range and affordable properties play a crucial role in driving demand. Many of these cities are evolving into academic, logistics, and industrial hubs, further fuelling housing requirements.
Increased urbanisation, coupled with government initiatives such as the Prime Minister’s Gati Shakti mission, is enhancing connectivity between satellite towns and major metropolitan centers, unlocking new opportunities for growth. Cities like Lucknow, Jaipur, and Bhubaneswar are witnessing steady price appreciation, reinforcing their market strength.
The affordable housing sector remains a key driver, with the Priority Sector Lending (PSL) category—covering homes priced under Rs 30 lakh—and the Rs 30-50 lakh segment attracting both first-time homebuyers and investors. Cities such as Ahmedabad, Pune, Indore, and Coimbatore are leading the way in affordable housing development, making homeownership more accessible to a wider demographic.
