Luxury and Sustainability in Tier-2 Cities: Real Estate Prospects in 2025
India’s primary housing market is expected to witness a moderate single-digit price rise in 2025, following a significant 21% surge in 2024. Industry experts attribute this trend to strong demand and limited supply, with a growing focus on sustainability
Real EstateTier2 CitiesSustainabilityTechnologyAffordable HousingReal Estate NewsJan 07, 2025
The focus is increasingly on sustainability and innovation, offering new ways to live, work, and invest in real estate.
In 2025, key trends such as sustainable living, advanced technologies, and evolving buyer preferences are likely to shape the future of the industry.
Price Growth Moderates in 2025
India's primary housing market may see a modest single-digit price rise in 2025, after a dramatic 21% surge in 2024.
Industry experts attribute the price increase to strong demand and limited supply, although developers are expected to ramp up new supply to meet market needs.
The Reserve Bank of India (RBI) is anticipated to cut the repo rate this year, which could lead to reduced interest rates on home loans and stimulate demand.
Additionally, stakeholders are hopeful for fiscal incentives in the upcoming budget to support the affordable housing segment, which has struggled in recent years.
Sustainability Takes Center Stage
Sustainability has taken a big leap in real estate.
Green buildings, energy-efficient designs, and eco-friendly communities are no longer niche choices but global priorities.
This shift is driven by a heightened awareness of climate change and the need to reduce environmental impact.
Mohit Bansal, CEO of GMI Infra, emphasizes the significance of this shift, stating, “As we move into 2025, the real estate sector is poised for major changes.
Urban growth is speeding up, while new technologies are transforming how people view residences and offices.
There is an increasing need for environmentally friendly structures, designs that conserve energy, and sustainable neighborhoods.
Sustainability has moved from being an option to becoming a necessity.”
Technological Innovation Redefines the Market
The role of technology in the real estate sector is expanding.
Artificial intelligence (AI) and blockchain are transforming the buying and selling process by increasing transparency and enabling smarter decision-making.
AI-driven analytics are helping to assess property values, risks, and market trends, while blockchain ensures secure and transparent transactions.
Furthermore, smart home technologies, the Internet of Things (IoT), and integrated automation systems are enhancing convenience, security, and energy efficiency in both residential and commercial properties.
Amar Shah, Co-founder of Golden Abodes, highlights the importance of these innovations, stating, “The real estate market in 2025 is set for a transformative period influenced by changing buyer preferences, technological advancements, and the need for sustainability.
The move towards combined, mixed-use projects will transform urban living, addressing the needs of a vibrant lifestyle where work, recreation, and community blend effortlessly.”
Evolving Buyer Preferences
Changes in buyer preferences are particularly evident with the rise of hybrid work models.
The growing trend of remote work has increased the demand for homes that serve multiple purposes, combining work, relaxation, and family activities.
Additionally, co-living and co-working spaces are becoming more popular, especially among younger generations who value flexibility, affordability, and a sense of community.
The luxury real estate market is also seeing increased demand, with buyers focusing on premium features and exclusive amenities.
However, there is also a simultaneous push for affordable housing to meet the diverse needs of the population.
These trends are not limited to major cities but are spreading to Tier 2 and Tier 3 cities, which are becoming key growth areas due to improved infrastructure and government support.
The Role of Tier 2 and Tier 3 Cities
Tier 2 and Tier 3 cities are emerging as crucial players in the real estate market.
These regions are attracting significant investment due to their affordability, improved infrastructure, and government incentives.
Developers are focusing on both affordable and high-quality housing to meet the growing demand in these areas, which are rapidly becoming attractive alternatives to metropolitan cities.
Looking Ahead
The real estate sector in 2025 will be defined by its adaptability to these changes.
The consolidation trend in the real estate sector is expected to continue, with consumers increasingly shifting toward reputable developers.
Major players are aggressively acquiring land through outright purchases and partnerships with landowners to meet the growing demand for residential and commercial spaces.
This trend is expected to accelerate in 2025 and beyond.
Real estate experts agree that the growth of the Indian real estate market will depend on continued policy intervention, technological innovation, and a focus on sustainability.
Frequently Asked Questions
What is the expected price growth in the primary housing market in India in 2025?
The primary housing market in India is expected to see a modest single-digit price rise in 2025, following a significant 21% surge in 2024.
What role does sustainability play in the real estate sector?
Sustainability has become a global priority in the real estate sector, with a focus on green buildings, energy-efficient designs, and eco-friendly communities. This shift is driven by a heightened awareness of climate change and the need to reduce environmental impact.
How is technology transforming the real estate market?
Technology, including AI and blockchain, is transforming the buying and selling process by increasing transparency and enabling smarter decision-making. Smart home technologies, IoT, and integrated automation systems are also enhancing convenience, security, and energy efficiency.
What are the current trends in buyer preferences in the real estate market?
Buyer preferences are evolving, particularly with the rise of hybrid work models. There is an increased demand for homes that serve multiple purposes, combining work, relaxation, and family activities. Co-living and co-working spaces are also becoming more popular among younger generations.
Why are Tier 2 and Tier 3 cities becoming key growth areas in the real estate sector?
Tier 2 and Tier 3 cities are becoming key growth areas due to their affordability, improved infrastructure, and government incentives. These regions are attracting significant investment and are rapidly becoming attractive alternatives to major cities.
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