5 Underrated South Indian Cities Becoming Luxury Property Hotspots
The demand for luxury housing in India is now growing beyond Tier-1 cities, driven by the expansion of Special Economic Zones (SEZs), coastal corporations (GCCs), the rise of semiconductor and EV manufacturing hubs, continued growth of logistics, and infrastructure upgrades. This article highlights five smaller and emerging cities in South India with significant appreciation in property prices, rental yields, and growth potential.
Reasons Why These Cities Are Emerging
- Economic decentralization is beginning to migrate wealth away from saturated metros to emerging urban centers. - Government action is supporting the growth of new growth corridors, special economic zones, and updated infrastructure. - Corporate and manufacturing investments by large companies are generating jobs and increasing demand. - Improved efficiency and accessibility throughout urban areas are supported by new airport expansions, ports, and industrial corridors. - Established branded real estate developers have entered new locations with luxury condominiums, enhancing credibility in these areas.
1. Mangaluru – Karnataka
Overview & Location Appeal: Mangaluru is a coastal city known for its untouched beaches, education centers, and growing urban amenities. It is highly regarded for its natural beauty and cultural heritage.
Key Economic Drivers: - Special Economic Zones (SEZs) focused on electronics and petrochemicals - Export-import ports - Growing logistics and IT parks
Major Developers & Luxury Projects: Prestige and Sobha have recently entered the market, offering premium ocean view luxury villas and gated communities.
Property Price Trends: Leading projects are adopting IGBC (Indian Green Building Council) certifications, with prices in Kadri reaching ₹6,000/sq.ft for premium green-certified apartments.
Investor Profile & Demand: Increased interest from Non-Resident Indians (NRIs) and affluent local buyers seeking retirement homes or vacation homes near the ocean.
2. Visakhapatnam – Andhra Pradesh
Overview & Location Appeal: A significant port city with a great climate, tourism opportunities, and superior education. It is a great coastal area to live in.
Key Economic Drivers: - SEZs for pharma and manufacturing - Visakhapatnam port - IT sector growth - Energy plants - Google’s $15 billion AI Hub project
Major Developers & Luxury Projects: Larsen & Toubro and DSR Builders are leading with luxury oceanfront apartments and townships.
Property Price Trends: Visakhapatnam’s real estate market is poised for sustained growth in the coming years. Factors like the city’s projected status as Andhra Pradesh’s executive capital, ongoing infrastructure upgrades, and increased government investment make it an attractive investment hub. The demand for both residential and commercial properties is expected to rise, with gated communities and luxury apartments gaining popularity.
Investor Profile & Demand: Strong local NRI participation; second homeowners and business professionals are primary purchasers.
Future Outlook: Airport runway expansion, data center hubs, and coastal corridor planning bode well for further value appreciation.
3. Coimbatore – Tamil Nadu
Overview & Location Appeal: An industrial and educational center with clean air, lifestyle facilities, and ongoing urbanization.
Key Economic Drivers: - Manufacturing units - Textile clusters - Soon-to-be-built IT parks - Enhanced logistics
Major Developers & Luxury Projects: Prestige and Puravankara are developing luxury gated communities and apartments with modern features.
Property Price Trends: Coimbatore’s real estate sector is thriving in 2025 across residential, commercial, and industrial segments. With rental yields averaging Rs. 10,800 per month, Coimbatore stands out as a promising market for long-term investors and rental income seekers.
Investor Profile & Demand: Primarily residents, High Net Worth Individuals (HNIs), and corporate executives; added interest from local NRIs.
Future Outlook: Regional airport enhancements are planned, and metro feasibility studies are under review.
4. Kochi – Kerala
Overview & Location Appeal: An upcoming commercial center with a coastal feel, rich culture, and excellent healthcare and education.
Key Economic Drivers: - IT parks in Infopark - Port-proximate logistics and shipping - Tourism
Major Developers & Luxury Projects: Sobha Limited and Asset Homes are developing luxury flats and waterfront properties.
Property Price Trends: Average apartment prices in prime areas ranged between ₹6,000 and ₹12,000 per sq ft during this period. Waterfront locations and transit-connected hubs achieved the highest price strength, while developing corridors showed room for incremental value movement.
Investor Profile & Demand: A healthy presence of NRIs; secondary homes and retiree buyers abound.
Future Outlook: Modernizing airport, smart city initiatives, and metro expansion provide a positive outlook.
5. Thiruvananthapuram – Kerala
Overview & Location Appeal: The state capital merging tradition with growing industrialization and IT. Desired for peaceful and safe living.
Key Economic Drivers: - Technopark IT SEZ - Defense manufacturing units - Port access
Major Developers & Luxury Projects: Asset Homes and Alliance Group are developing luxury high-rises and villas.
Property Price Trends: The city’s housing market is showing steady appreciation and consistent demand. Property values across major zones have grown by nearly 10–12% in 2025, supported by infrastructure expansion, increased employment opportunities, and lifestyle upgradation.
Investor Profile & Demand: A mix of NRIs, government employees, and businessmen.
Future Outlook: Continued expansion of the airport and infrastructure upgrades are expected to further increase demand.
Who Should Consider Investing
- Investors looking for long-term capital gains beyond metropolitan hubs. - Non-Resident Indians seeking affordable luxury homes with good rental opportunities. - Property investors wanting a steady income from rental in cities with developing industrial and commercial sectors.
