Rise in Plotted Developments in Tier II Cities: A New Trend in Indian Real Estate
In 2025, Tier II cities in India are witnessing a significant rise in plotted developments, driven by changing lifestyle preferences and high ROI, reshaping the country's real estate market.
Real EstateTier Ii CitiesPlotted DevelopmentsInvestmentRoiReal EstateAug 31, 2025
For years, vertical expansion dominated the real estate vocabulary, but in recent years, the changed preference of modern homebuyers has shown otherwise. A recent PropEquity report states that between 2022 and May 2025, more than 4.7 lakh residential plots were introduced in Tier I and Tier II cities. Of which, 2.43 lakh plots were offered in the seven major Tier II markets, with 52% of these launches taking place in Tier II cities alone. The astounding percentage highlights how non-metropolitan areas are becoming increasingly significant in determining the outlook of Indian real estate.
Commenting on this, Parvinder Singh, CEO of Trident Realty, says, “The growing preference for land ownership in India, particularly in Tier II cities, is a consequence of evolved lifestyle choices that sought deeper connections with their living spaces. Tier 2 cities like Panchkula are becoming new frontiers to the trend, offering the perfect blend of premium living and natural beauty. Our projects are a reflection of this shared vision. Our project, Trident Hills, located at the foothills of the scenic Shivalik range in Panchkula, is a testament to the growing demand. The overwhelming response to the launch of this premium project reinforces the appeal of plotted developments, especially in the emerging urban hubs. At Trident, we remain focused on creating such communities that combine natural beauty, modern amenities, and thoughtfully designed environments that promote both well-being and quality of life.”
Unlike high-rise housing that often adds pressure on municipal infrastructure, plotted formats, especially when integrated into township models, support low-density, planned growth. They provide purchasers with increased flexibility, privacy, enduring value, and customization while enabling developers to enhance land utilization without the complications of vertical structures. In fast-growing Tier II cities, this model is helping meet rising demand without overwhelming civic systems, positioning plots as a practical and future-ready housing option.
Prominent developers like DLF, M3M, Godrej, and Prestige have strategically placed themselves in Tier II cities due to the growing demand for plotted developments. Their successful projects indicate an industry-wide transition to land ownership and low-density living, driven by changing preferences of buyers.
Mr. Robin Mangla, President of M3M India, highlighted, “Tier II cities are rapidly emerging as the new hotspots of India’s real estate growth, driven by evolving housing preferences and a renewed interest in land and plotted developments. Panipat’s real estate market is aligning with this national resurgence, fueled by a desire for greater ownership, customization, and long-term value creation. The city’s strategic location, supported by rapid infrastructure upgrades like the Delhi–Katra Expressway and Namo Bharat connectivity, is making it a preferred choice for both investors and end-users. At M3M India, we view this as an exciting phase where plotted developments are not just fulfilling lifestyle aspirations but also redefining residential investment in high-potential urban centers.”
According to an ET Report, chief economist and head of research, Samantak Das of JLL India, notes that 944 acres were acquired in the March quarter, with 20% allocated for plotted developments. Developers purchased over 2,300 acres across 23 cities in 2024, with 38% designated for plotted or low-rise residential projects.
Mr. Santosh Agarwal, CFO and Executive Director of Alpha Corp Development Limited, shares his viewpoint, “Land ownership is witnessing a strong resurgence in India, with Tier II cities like Karnal emerging as prominent hubs for plotted development. Branded, amenity-rich communities offering verified titles, robust infrastructure, and design flexibility are enabling buyers to build at their own pace while benefiting from lower development costs and faster returns. As developers, we view this shift as a strategic evolution—driving diversification, enhancing liquidity, and fostering scalable growth. Furthermore, our focus remains on delivering meticulously planned plotted developments with modern infrastructure, empowering customers to secure valuable assets today while shaping them to their lifestyle, ensuring long-term value and quality living.”
From an investment standpoint, plots are proving to be a smart bet. They offer superior ROI in several Tier II markets, making it a lucrative investment for premium developers. Moreover, with RERA regulations covering plotted layouts and improved digital land records in many states, investor confidence in land transactions has also risen substantially. As the housing preferences evolve in Tier II cities, land ownership is firmly re-entering the mainstream of India’s housing narrative.
Frequently Asked Questions
What is driving the trend of plotted developments in Tier II cities?
The trend is driven by changing lifestyle preferences, design autonomy, lifestyle flexibility, and long-term investment interest. Homebuyers are increasingly associating urban growth with horizontal expansion.
How do plotted developments benefit Tier II cities?
Plotted developments support low-density, planned growth, providing purchasers with increased flexibility, privacy, and customization. They also help meet rising demand without overwhelming civic systems.
Which developers are leading the charge in Tier II cities?
Prominent developers like DLF, M3M, Godrej, and Prestige are strategically placing themselves in Tier II cities due to the growing demand for plotted developments.
What are the benefits of investing in plotted developments?
Plotted developments offer superior ROI, verified titles, robust infrastructure, and design flexibility. They also benefit from lower development costs and faster returns.
How are regulations and digital land records impacting investor confidence?
RERA regulations covering plotted layouts and improved digital land records in many states have significantly increased investor confidence in land transactions.
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