Real Estate Momentum Shifts: Property Price Growth Puts Tier-II Cities Ahead of Metros

India’s real estate sector, currently valued at Rs. 22.5 trillion and contributing 7.2 percent to the national economy, is undergoing a structural shift. The Tier-II cities which were once considered secondary options in the real estate dynamics are now emerging as prime destinations rephrasing the luxury residential estate.

While metro cities like Mumbai, Delhi, and Bengaluru continue to dominate the premium housing sales, the surge in Tier-II demand is steadily redrawing the map. Rising disposable incomes, significant infrastructure upgrades, and a growing demand for smarter, modern living have turned these untapped cities into strong contenders for luxury real estate investment.

As per the recent report by Magicbricks, the average capital growth rate for Tier-II cities is 17.6 percent, surpassing the 11.10 percent for the national capital. The Tier-II cities are now registering a double-digit YOY growth, outpacing the traditional Tier-I cities.

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Commenting on this, Parvinder Singh, CEO, Trident Realty says, "The double-digit price growth and premium housing market in Tier-II cities is a clear signal of real estate fundamentals leading in these markets. What was once driven primarily by affordability is now equally shaped by enhanced infrastructure and a rising aspirational population with sustained and meaningful demand. At Trident Realty, our strategic focus on high-potential Tier-II regions has consistently delivered strong appreciation and buyer confidence. Our townships in Panchkula are a testament to this vision reflecting the vibrancy and promise of these emerging urban centers. As infrastructure continue to scale up, we foresee Tier-II cities not only outperforming in ROI but also setting new standards for quality urban development in India.”

The recent market data from 19 key Tier-II cities reveals a significant upward trend in property values, indicating a change in the dynamics of India’s real estate market. Lucknow led the charge with a 23.7 percent YoY increase in property prices while Goa stood out in the west with a significant 64.61 percent jump, bringing average rates to Rs. 14,028 per sq ft in the April-June 2025 quarter.

In contrast, Tier-I cities such as Mumbai, Delhi, and Chennai experienced capital gains of 25.4 percent, 11.1 percent, and 14.9 percent, respectively. This data demonstrates the untapped investment potential of Tier-II cities, which are increasingly turning into major drivers of the real estate growth. 

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Santosh Agarwal, CFO and Executive Director of Alpha Corp Development Limited, said, "Tier-II cities are increasingly surpassing metros in property appreciation, driven by robust infrastructure development and changing buyer aspirations. Moreover, cities like Meerut have evolved into a promising real estate destination due to enhanced connectivity and urban expansion. Additionally, Karnal, in particular, is undergoing remarkable transformation with the progress of the RRTS extension, significantly improving its connectivity with Delhi and bringing broader benefits to the region. This advancement is pivotal for the people of Karnal, promising faster transit, increased economic opportunities, and overall regional development. Furthermore, infrastructure upgrades and better accessibility are redefining these cities will open the doors for realty development opportunities, attracting both end-users and investors.

These cities are offering more than affordability and offering a unique experiential value. With lower density, better air quality, scenic surroundings, and improving social infrastructure, Tier-II cities are increasingly seen as offering a superior quality of life compared to overcrowded metros. As a result, as demand moves beyond metros, developers are strategically acquiring land and launching premium projects in emerging regions.

The future of India’s premium housing market is no longer confined to its big cities. With buyers prioritizing intelligent living, lifestyle quality, and wellness-oriented design, Tier-II cities are not just catching up, they are leading the next wave of growth in India’s real estate story.