Tier-2 Housing Prices Outpace Top Eight Cities
Residential prices in 11 emerging Indian cities grew 63 percent between 2021 and 2026. Top eight markets recorded 42 percent growth over the same period.
Residential prices in 11 emerging Indian cities grew 63 percent between 2021 and 2026. Top eight markets recorded 42 percent growth over the same period. The CII-Knight Frank India report released on Friday highlights this divergence. Tier-2 markets now show stronger price momentum than traditional hubs.
The report identifies Bhopal, Bhubaneswar, and Chandigarh as key growth centers. It also lists Goa, Indore, Jaipur, Kochi, Lucknow, Nagpur, Visakhapatnam, and Coimbatore. These cities recorded an average compound annual growth rate of 8 percent. The top eight markets achieved a 4 percent average CAGR between 2016 and 2026.
Price gaps widen in recent years
Average residential prices in the 11 emerging markets range from 4,500 to 13,500 rupees per square foot. The report attributes this growth to stronger economic fundamentals. Infrastructure development and better connectivity drive higher consumption. Knight Frank India notes that real estate growth is broadening beyond metropolitan centers.
Infrastructure spending supports market expansion
Infrastructure expenditure share in government capital spending rose to 55 percent in FY26. This was up from 39 percent in FY15. The three-year public-private partnership pipeline includes 852 projects. The combined cost of these projects is 17 lakh crore rupees.
Commercial activity expands in smaller markets. Key Tier-2 cities recorded 11.2 million square feet of warehousing leases in 2025. Six emerging markets accounted for 5.3 million square feet of that total. Twenty-four Tier-2 cities held 36 million square feet of shopping-center stock. This represented a significant portion of the 134 million square feet national total.
Sector projected to reach 5.8 trillion dollars
The real estate sector could reach 5.8 trillion dollars by 2047. Tier-2 and Tier-3 cities are expected to contribute 25 to 30 percent. This value equals 1.4 to 1.7 trillion dollars. Growth depends on serviced land and efficient approvals. Reliable utilities and infrastructure must generate sustained employment and enterprise.
