Tier 2 and Tier 3 cities in India are rapidly emerging as new growth hubs, attracting both homebuyers and real estate developers seeking opportunities beyond the saturated metro markets. Their rising appeal lies in a combination of affordability, improved infrastructure, and evolving urban lifestyles. As property prices continue to soar in metropolitan areas, buyers are increasingly drawn to the more spacious and cost-effective housing options these emerging cities offer.
As per a CREDAI-Liases Foras research report on the real estate sector of 60 Indian cities, as many as 44% of the 3,294 acres of land acquired by real estate developers in 2024 were concentrated in the emerging hubs of India’s Tier-2 and Tier-3 cities. The report said housing sales in 2024 reached 681,138 units across 60 cities, recording a 23% Y-o-Y increase. The primary developers’ market registered a sales value of Rs 7.5 trillion, reflecting a staggering 43% YoY growth, propelled by sustained demand across segments.
Notably, the luxury and ultra-luxury segments dominated the market, contributing to 71% of the 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. Further, properties priced between Rs 1–2 crore saw a 52% jump in sales, with 1,32,532 apartments sold in 2024, while the ultra-luxury segment (Rs 2 crore+) witnessed a steep rise of 73%. The swift expansion of infrastructure in Tier-2 and Tier-3 cities is also playing a pivotal role in driving luxury real estate growth.
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Deepak Kapoor, Director, Gulshan Group, says, “Luxury living is no longer restricted to metro cities. Tier 2 cities are increasingly emerging as the new frontiers of growth, driven by their proximity to Delhi-NCR and the growing pool of high-net-worth individuals who are seeking quality living spaces that are on par with global lifestyle standards. Thus, with an increasingly affluent population and a robust demand for luxury living, these cities are well-positioned to attract significant investment in the coming years.”
Moreover, post-pandemic, the rise of remote and hybrid work models has significantly influenced homebuyer preferences, driving demand for larger homes in Tier 2 and 3 cities. Professionals are prioritizing spacious residences with better amenities, seeking a balance between work and lifestyle away from the congestion of metros.
Manit Sethi, Director, Excentia Infra, says, “Homebuyers today don’t just look at property prices; they want a holistic lifestyle, and Tier 2 cities like Dehradun offer exactly that. The fresh air, scenic beauty, and balanced pace of life make it an attractive choice for families, retirees, and professionals. Dehradun, with its educational institutions and other facilities, provides the perfect mix of urban convenience and natural serenity.”
Realty development has also picked up pace in cities like Agra, Varanasi, Lucknow, and Jaipur.
“Cities like Jaipur are no longer secondary markets—they’re fast emerging as growth engines for India’s real estate sector. With improved infrastructure, rising urban aspirations, and increasing interest from both investors and homebuyers, Tier 2 cities are offering the perfect blend of affordability and long-term value. At Manglam Group, we’ve seen first-hand how Jaipur is transforming into a premium destination for sustainable and luxury developments. The future of real estate lies in these evolving urban hubs that balance opportunity with liveability,” says Amrita Gupta, Director, Manglam Group.
S K Narvar, Group Chairman, Trident Realty, says, “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. We’ve embraced this trend by developing Trident Hills in Panchkula, a township that reflects the promise of these vibrant urban centers. 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.”
Yash Miglani, Managing Director, Migsun Group, says, “Tier 2 cities are now at the center of India’s real estate transformation. With rising property values in metros, investors and homebuyers alike are shifting to these high-growth markets. These cities are grabbing headlines due to better affordability, infrastructure expansion, and improved job opportunities they offer. Besides, developers are responding with premium projects, bringing the same level of luxury and lifestyle as metros.”
Ambika Saxena, Director- Corporate Communications, Bayside Corporations (BCS), says, “Tier 2 cities are no longer alternatives to metros. One of the primary drivers of growth in these cities is the rising demand for housing. With rapid infrastructure growth, smart city initiatives, and strong economic activity, cities like Goa and Shimla have emerged as real estate hotspots; ans the list is endless.”
Thus, the shift of real estate toward Tier 2 and 3 cities is more than just a trend—it’s a fundamental transformation in how and where people choose to live and invest. With rapid infrastructure expansion, rising disposable incomes, and changing lifestyle preferences, these cities are emerging as the next big growth hubs. As affordability, connectivity, and luxury converge, Tier 2 cities are no longer secondary choices; they are the future of real estate in India, offering unmatched opportunities for homebuyers and investors.
