Housing prices in 11 emerging Tier-2 cities grew at an average 8% compound annual growth rate (CAGR) between 2016 and 2026, twice the 4% CAGR recorded across India’s top eight cities during the same period. This shows that home prices in these smaller markets have risen at a faster annual pace than in the major metropolitan markets.
The difference is also visible over the past five years. Between 2021 and 2026, residential prices in the 11 emerging markets increased by 63%, compared with a 42% rise across the top eight cities.
11 cities record faster price growth
The 11 emerging markets include Bhopal, Bhubaneswar, Chandigarh Tricity, Goa, Indore, Jaipur, Kochi, Lucknow, Nagpur, Visakhapatnam and Coimbatore. The eight major markets used for comparison are Mumbai, Bengaluru, Delhi-NCR, Hyderabad, Chennai, Pune, Ahmedabad and Kolkata.
The stronger growth in these cities has come alongside improvements in infrastructure and connectivity. Rising economic activity and consumption are also supporting housing demand across these markets.
The figures show that Tier-2 cities housing prices rise at a faster annual rate than prices in the major metropolitan markets over the 2016 to 2026 period.
Prices vary across the markets
Average residential prices across the 11 emerging markets range from about ₹4,500 to ₹13,500 per sq ft. Prices vary from one city to another, with Goa at the higher end and Nagpur and Visakhapatnam at the lower end of the reported range.
Despite the faster growth, residential prices in these markets remain lower than those in many major metropolitan markets. The latest data on Tier-2 cities housing prices rise also shows that price levels and growth rates differ across individual cities.
Overall, the Tier-2 cities housing prices rise trend highlights faster residential price growth in emerging markets, alongside improvements in infrastructure, connectivity and economic activity.
