Tier-2 Housing Prices Rise 63 percent in Five Years, Outpacing Metros

Residential property prices across 11 emerging Tier-2 markets in India rose 63% between 2021 and 2026, significantly outpacing the 42% increase recorded across the country's eight largest cities, according to a joint report by the Confederation of Indian Industry (CII) and Knight Frank India.

The report, titled India's Next Real Estate Markets, identifies Bhopal, Bhubaneswar, Chandigarh Tricity, Goa, Indore, Jaipur, Kochi, Lucknow, Nagpur, Visakhapatnam and Coimbatore as emerging real estate markets. It was released at the CII Real Estate Summit in New Delhi on September 18.

The difference is also visible over a longer period. The 11 emerging markets recorded an average compound annual growth rate (CAGR) of 8% in residential prices between 2016 and 2026, twice the 4% CAGR recorded across Mumbai, Bengaluru, Delhi-NCR, Hyderabad, Chennai, Pune, Ahmedabad and Kolkata.

Knight Frank attributed the stronger performance of the smaller markets to improving infrastructure, better connectivity, strengthening economic activity and rising consumption. The New Indian Express also cited the growth of manufacturing and services, the availability of talent and the expansion of Global Capability Centres as factors supporting these markets.

The price levels, however, remain different from those in India's major metropolitan markets. According to the report as cited by Hindustan Times, average residential prices across the 11 emerging markets range from ₹4,500 to ₹13,500 per square foot. Goa sits at the upper end of that range, while Nagpur and Visakhapatnam are at the lower end.

Goa's residential prices are reported at ₹11,500-13,500 per square foot, followed by Chandigarh Tricity at ₹7,500-10,500. Jaipur and Kochi are in the ₹7,000-9,000 range, while Bhubaneswar is at ₹6,550-8,550 and Lucknow at ₹6,500-8,500. Nagpur and Visakhapatnam are reported at ₹4,500-6,500 per square foot.

The housing market is also changing in terms of what buyers seek. The CII-Knight Frank report says post-pandemic changes, including hybrid working and shifts in household finances, have given buyers greater flexibility over where they live. In Tier-2 markets, buyers are increasingly moving from standalone buildings and conventional housing towards integrated communities with amenities.

Residential growth is happening alongside expansion in other parts of the property market. Key Tier-2 markets recorded 11.2 million square feet of warehousing leasing in 2025, broadly similar to the 11.4 million square feet recorded in 2024. The report also found that 36 million square feet of India's 134 million square feet of organised shopping-centre stock in 2025 was located across 24 Tier-2 cities.

The findings do not mean India's largest cities are losing their central role. The report expects the top eight markets to continue anchoring the sector because of their scale. Instead, the data points to a broader real estate market in which smaller cities are taking a larger share of future growth.

For homebuyers, the trend also means that "Tier-2" can no longer simply be treated as shorthand for cheaper housing. Several of these markets have experienced substantial price appreciation while remaining at different stages of infrastructure and economic development. Local employment, connectivity, supply and the type of housing being built will therefore matter alongside headline price growth.

The report projects population growth in cities beyond India's top eight metros at 28.2%, compared with 8.7% in the largest eight cities. That demographic shift could further widen the geographic base of India's housing demand, although the pace of growth will vary considerably from one emerging city to another.

Sources

https://www.hindustantimes.com/real-estate/tier2-cities-such-as-goa-bhopal-lucknow-coimbatore-see-63-rise-in-housing-prices-in-5-years-report-101789749809382.html

https://www.business-standard.com/finance/personal-finance/property-boom-beyond-metros-11-cities-see-63-price-rise-in-five-years-126091800492_1.html

https://www.newindianexpress.com/india/2026/Sep/18/indias-real-estate-prices-rise-63-in-five-years-across-11-non-metro-cities-report

https://www.fortuneindia.com/real-estate/tier-2-cities-see-63-rise-in-home-prices-in-5-years-outpace-top-8-metros-cii-knight-frank-india/160035

https://www.moneycontrol.com/news/business/real-estate/tier-2-cities-outpace-top-metros-in-home-price-growth-remain-cheaper-says-report-14033062.html/

https://www.outlookmoney.com/invest/beyond-the-metros-tier-2-cities-see-63-per-cent-rise-in-home-prices-in-five-years-says-report