Introduction
Real Estate Prices in Tier 2 Cities are experiencing dynamic shifts, with Jaipur recording the highest growth in property prices. According to PropEquity, an NSE-listed data analytics firm, the weighted average price of new launch projects in the top 30 Tier 2 cities increased by up to 65% between 2023 and October 2024. This surge highlights the growing potential of these emerging urban hubs in India’s real estate landscape.
North India: Jaipur Leads the Pack
Jaipur demonstrated an exceptional 65% growth in Real Estate Prices in Tier 2 Cities , with the weighted average price of new launches rising from ₹4,240 per sq. ft. in 2023 to ₹6,979 per sq. ft. by October 2024. This remarkable growth positioned Jaipur as the top performer among Tier 2 cities. Following closely were Indore, with a 20% increase, and Dehradun, which saw a 14% rise in property prices.
Conversely, Sonepat recorded the most significant price decline, dropping by 26%, followed by Mohali at 8% and Bhopal at 5%. Meanwhile, cities like Agra (59%), Chandigarh (34%), and Bhiwadi (25%) also witnessed substantial price increases, albeit with a limited number of new project launches, ranging between 3 to 5 during this period.
Southern India: Guntur Tops with 51% Growth
Southern Tier 2 cities have shown impressive growth, with Guntur leading the way with a 51% increase, taking the weighted average price of new launch projects to ₹5,169 per sq. ft. Mangalore (41%) and Visakhapatnam (29%) followed closely. However, some cities, such as Mysore (-14%) and Trivandrum (-4%), witnessed a decline in prices.
Western India: Moderate Gains in Gujarat and Maharashtra
In Western India, Gandhi Nagar led the market with a 19% increase to ₹4,844 per sq. ft., followed by Surat (14%) and Nagpur (12%). Despite these gains, cities like Surat and Gandhi Nagar still offer affordable prices below ₹5,000 per sq. ft., making them attractive investment options.
Interestingly, Goa stood out as the only Tier 2 city to cross the ₹10,000 per sq. ft. mark in weighted average prices, showcasing its strong appeal as a luxury destination.
Eastern India: Bhubaneshwar and Raipur Shine
Real Estate Prices in Tier 2 Cities: Eastern India has shown steady growth in the real estate sector. Bhubaneshwar experienced a 15% rise in the weighted average price of new launches, reaching ₹7,731 per sq. ft., while Raipur saw a 14% increase, climbing to ₹3,810 per sq. ft. These trends reflect the rising demand for housing in these regions, fueled by ongoing infrastructure development and the pace of urbanization. The growth highlights Eastern India’s increasing prominence in real estate prices in Tier 2 cities
Key Drivers of Price Trends in Tier 2 Cities
According to Samir Jasuja, founder and CEO of PropEquity, Tier 2 cities have garnered renewed interest from developers, corporates, financial institutions, and investors. The key factors contributing to this trend include:
- Affordable Land Availability: The cost of land in Tier 2 cities is substantially lower compared to Tier 1 cities, making these regions highly attractive for real estate developers aiming to deliver cost-effective projects.
- Infrastructure Development: Improved connectivity, enhanced public amenities, and modern urban planning are significantly boosting real estate demand in these emerging cities, transforming them into investment hotspots.
- Strong Demand for Premium Housing: Rising disposable incomes and the aspiration for elevated living standards are fueling the demand for luxury and premium housing in Tier 2 markets, contributing to increased property prices.
- Expansion by New Developers: Both established and new developers are seizing the opportunity to launch projects in Tier 2 cities, driven by the market’s growth potential and untapped demand.
Real estate prices in Tier 2 cities are surging, propelled by these key factors, indicating a bright future for India’s secondary urban centers.
Future Prospects for Real Estate in Tier 2 Cities
With urbanization accelerating and infrastructure advancing, Tier 2 cities are emerging as the next big real estate hotspots. The combination of affordable land costs and a rising focus on premium housing makes these cities lucrative investment destinations. Real estate prices in Tier 2 cities, like Jaipur with its remarkable 65% growth, exemplify the untapped potential of these markets. These cities are playing a pivotal role in shaping the future of Indian real estate, attracting developers and investors alike.
For investors and homebuyers, this is the right time to explore opportunities in Tier 2 cities, where growth and affordability converge.
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Conclusion
The real estate market in Tier 2 cities has shown remarkable resilience and growth, with cities like Jaipur, Guntur, and Bhubaneshwar leading the charge. These emerging urban centers are proving to be not only affordable but also promising hubs for future development, attracting attention from developers and investors alike.
If you’re considering real estate investments, exploring Tier 2 cities could be your next best move.
