Tier-2 Indian cities see 63% real estate boom, outpacing major metros

A joint report by the Confederation of Indian Industry (CII) and Knight Frank India, titled ‘India’s Next Real Estate Markets’, reveals a significant structural shift in the Indian real estate sector. Eleven emerging Tier-2 cities have seen residential property prices rise by an average of 63% over the last five years, outpacing the 42% growth recorded in the country’s eight major metropolitan hubs, including Mumbai, Delhi-NCR, and Bengaluru.

The high capital appreciation in Tier-2 markets—which include Lucknow, Nagpur, Bhopal, Bhubaneswar, Chandigarh, Goa, Indore, Jaipur, Kochi, Visakhapatnam, and Coimbatore—is driven by rapid infrastructure expansion. Key factors include the development of metro rail networks, new expressways, ring roads, and international airports. Proximity to metro stations and transit corridors has become a primary determinant of property value.

In Nagpur specifically, residential prices are reported to be between ₹4,500 and ₹6,500 per square foot. The shift is also characterized by changing buyer preferences; investors and homeowners are increasingly prioritizing modern amenities, connectivity, and access to schools and hospitals over mere affordability.