From Metros to Mini Metros: Tier-II Cities Drive India’s Real Estate Boom

As India’s real estate sector enters a new phase of expansion, Tier-II cities are rapidly emerging as hotspots for luxury housing, driven by rising aspirations, infrastructure investments, and a renewed focus on integrated townships.

According to a recent report from property consultant ANAROCK, land transactions in the first half of 2025 have already exceeded full-year 2024 volumes. This underscores developers’ strong confidence in the country’s expanding real estate horizon.

The data shows that land deals across Tier-II and III cities in the first half of 2025 have surpassed those in Tier-I cities. In H1 2025, land deals in Tier-II and III cities amounted to around 1,907 acres, compared to 991 acres in Tier-I cities. Market observers say that this shift represents a decentralization of investment away from metro-heavy markets.

With Colliers India projecting that 40 percent of India’s population will reside in urban areas by 2030, developers are turning to self-sustained townships as the future of modern urban living. These townships are designed to offer a holistic living experience, combining residential spaces with commercial and recreational facilities.

Cities like Ayodhya, Lucknow, Chandigarh, Ludhiana, Indore, Rishikesh, Prayagraj, Dehradun, Amritsar, Vrindavan, and Goa are witnessing a surge in real estate demand. The rise in tourism, both leisure and religious, has played a significant role in this trend. For instance, Ayodhya, with its historical and religious significance, has seen a significant increase in residential demand as more people look to settle in the city.

Similarly, cities like Rishikesh and Dehradun, known for their natural beauty and spiritual significance, are attracting homebuyers and real estate investors looking for a peaceful and serene living environment. The development of infrastructure, including better connectivity and amenities, has further fueled this demand.

In Goa, the focus on luxury and premium living has attracted a diverse range of buyers, from young professionals to retirees looking for a second home. The state’s picturesque beaches and vibrant culture have made it a popular destination for both domestic and international buyers.

The shift towards Tier-II cities is not just about residential properties. Commercial real estate is also seeing a surge, with many businesses setting up operations in these cities. This trend is expected to continue as more people move to these locations, creating a robust demand for office spaces, retail outlets, and other commercial properties.

Real estate experts believe that the growth in Tier-II cities is sustainable and will continue to drive the sector’s expansion in the coming years. The government’s focus on infrastructure development, including the expansion of metro networks and the construction of new roads and highways, will further boost this growth.

In conclusion, the real estate landscape in India is undergoing a significant transformation, with Tier-II cities emerging as the new frontiers of development. As these cities continue to grow and attract more investment, they are set to play a crucial role in shaping the future of urban living in the country.