Rise of Tier-2 Cities: Property Prices Surge by 10-15% in Prime Areas
Capital values in premium localities of Goa, Chandigarh Tricity, and Kochi are now almost at par with key markets in Delhi-NCR and Mumbai Metropolitan Region.
Real EstateTier 2 CitiesProperty PricesIndiaHousingcomReal Estate MumbaiJun 13, 2024
Dhruv Agarwala, Group CEO of Housing.com said, 'The real estate narrative of India is evolving rapidly, with Tier-2 cities like Kochi, Jaipur, Goa, and Chandigarh Tri-city emerging as new growth powerhouses. Our proprietary Property Buy Index reveals Tier-2 cities surpassing the top eight metros by a staggering 88 points, underscoring their increasing prominence and service sector potential.'
Key highlights from 'The Bharat in India' report include
Key micro-markets in Tier-2 cities have witnessed significant double-digit capital value appreciation of 10-15% year-on-year, narrowing the price gap with top metros.
Capital values in premium localities of Goa, Chandigarh Tricity, and Kochi are now almost at par with key markets in Delhi-NCR and Mumbai Metropolitan Region.
Tier-2 cities like Goa boast robust rental markets with yields as high as 8%, in contrast to 2-3% in major metros.
Homebuyer preferences are shifting towards high-rise apartments and lifestyle amenities like clubhouses, open spaces, and sports facilities.
Online property searches by potential buyers in the INR 1-2 crore segment have surged 61%, while the above INR 2 crore bracket has seen a growth of 121%.
'The economic kaleidoscope is shifting, and Tier-2 urban clusters are emerging as new magnets for the skilled workforce and the start-up ecosystem. This report paints a compelling picture of India's evolving real estate landscape and underscores the immense opportunities that lie ahead for investors, developers, and homebuyers looking beyond the traditional real estate hotspots. Tier-2 cities are no longer on the sidelines; they are becoming major players, attracting investments and offering attractive opportunities,' Agarwala added.
Ankita Sood, Head of Research at Housing.com, said, 'Tier-2 cities are the true Bharat of India and their growth momentum has been phenomenal over the last half decade. Trending on our Property Buy Index, which tracks high-intent high volume property activity on our portal, the Tier IIs registered a 88 point lead over the metros. This growing demand for property has pushed prices upwards by 10-15% in key micro markets, bringing some cities like Kochi, Goa, and Lucknow on par with the property prices of key markets in the metros of Gurugram, Mumbai, Bengaluru and Hyderabad.'
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Housing News Desk is the news desk of leading online real estate portal, Housing.com. Housing News Desk focuses on a variety of topics such as real estate laws, taxes, current news, property trends, home loans, rentals, décor, green homes, home improvement, etc. The main objective of the news desk, is to cover the real estate sector from the perspective of providing information that is useful to the end-user.
Frequently Asked Questions
What is the growth rate of property prices in Tier-2 cities?
Property prices in Tier-2 cities have witnessed a significant double-digit capital value appreciation of 10-15% year-on-year.
Which cities have seen a surge in property prices?
Cities like Kochi, Goa, and Lucknow have seen a significant increase in property prices, with some areas reaching prices comparable to key markets in Delhi-NCR and Mumbai Metropolitan Region.
What is driving the growth of Tier-2 cities?
The growth of Tier-2 cities is driven by economic diversification, rising consumer demand, and reverse migration patterns accelerated by the pandemic.
What is the Property Buy Index?
The Property Buy Index is a proprietary index of Housing.com that tracks high-intent high volume property activity on its portal.
What is the average rental yield in Tier-2 cities?
Tier-2 cities like Goa boast robust rental markets with yields as high as 8%, in contrast to 2-3% in major metros.
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