Tier-2 Cities Witness 10-15% Growth in Property Prices, Outperforming Metros
Tier-2 cities in India are rapidly closing the gap with Tier-1 cities, driven by economic diversification, rising consumer demand, and reverse migration patterns.
Tier 2 CitiesReal EstateProperty PricesHousingcomIndiaReal EstateJun 13, 2024
The report highlights that 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. Cities like Goa, Chandigarh Tricity, and Kochi are now almost at par with key markets in Delhi-NCR and Mumbai Metropolitan Region.
Tier-2 cities are also boasting 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%. 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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Frequently Asked Questions
What is driving the growth of Tier-2 cities in India?
The growth of Tier-2 cities is driven by economic diversification, rising consumer demand, and reverse migration patterns.
How much have property prices increased in Tier-2 cities?
Property prices in Tier-2 cities have increased by 10-15% year-on-year, narrowing the price gap with top metros.
What are the preferred amenities of homebuyers in Tier-2 cities?
Homebuyers in Tier-2 cities are preferring high-rise apartments and lifestyle amenities like clubhouses, open spaces, and sports facilities.
How has the rental market performed in Tier-2 cities?
Tier-2 cities are boasting robust rental markets with yields as high as 8%, in contrast to 2-3% in major metros.
What is the significance of Tier-2 cities in India's real estate market?
Tier-2 cities are emerging as new growth powerhouses and will continue to play a key role in shaping the future of India's real estate market.
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