Tier-II cities emerge as drivers of India’s real estate growth

Tier-II cities drive India’s real estate boom with land deals, townships, tourism & ₹143 lakh crore infra push, reshaping future luxury housing demand

India’s real estate sector is entering a new phase of expansion, with Tier-II cities increasingly becoming focal points for luxury housing and integrated townships. Rising aspirations, infrastructure upgrades, and decentralised investment patterns are reshaping the country’s property landscape, moving beyond the traditional metro-centric model.

Recent data from property consultant ANAROCK highlights this shift, showing that land transactions in Tier-II and III cities during the first half of 2025 surpassed those in Tier-I metros. These smaller cities accounted for nearly 1,907 acres of deals compared to 991 acres in Tier-I markets, reflecting developers’ growing confidence in emerging regions.

The trend is supported by projections from Colliers India, which estimates that 40 percent of India’s population will reside in urban areas by 2030. Developers are responding by focusing on self-sustained townships that integrate retail, healthcare, education, wellness, entertainment, premium residences, and green zones. Such projects are redefining lifestyle aspirations in Tier-II India, offering a blend of convenience, community, and luxury.

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Cities including Ayodhya, Lucknow, Chandigarh, Ludhiana, Indore, Rishikesh, Prayagraj, Dehradun, Amritsar, Vrindavan, Sonipat, and Goa are witnessing strong demand. Infrastructure improvements, enhanced connectivity, and tourism-led investments are driving real estate value in these regions. A notable trend is the rise of eco-friendly and luxury second homes, with buyers seeking both serenity and long-term appreciation.

Tourism has emerged as a key catalyst. Ayodhya’s transformation into a spiritual and cultural hub following the Ram Mandir inauguration, Goa’s year-round tourism cycle, and Rishikesh’s positioning as a wellness destination are fueling residential demand. These cities naturally support township ecosystems, attracting end-users, NRIs, and investors.

Prominent developers are aligning projects with evolving consumer preferences, particularly in cities like Sonipat, Panipat, and Karnal, where demand for larger homes, gated communities, and green spaces is rising. Backed by over ₹143 lakh crore in national infrastructure investments, Tier-II cities are poised to redefine urban living.

With growing emphasis on sustainability, security, and community-centric living, Tier-II markets are set to play a pivotal role in India’s real estate expansion, positioning themselves as serious contenders in the luxury housing landscape.

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