Indian real estate market geographic shift

The Indian real estate market is undergoing a structural shift as investment and interest move from major metropolitan areas toward Tier 2 cities. Early data indicated that residential capital values in major metros surged by 59% between 2021 and 2025, driven by rising land prices and increased construction costs for materials like steel.

Subsequent reports from the Confederation of Indian Industry and Knight Frank India confirm this trend, noting that eleven emerging Tier 2 cities—including Lucknow, Nagpur, and Jaipur—experienced an average residential property price increase of 63% over five years. This growth outpaces the 42% growth seen in the country’s eight largest metropolitan hubs.

This expansion in Tier 2 markets is attributed to rapid infrastructure development, such as metro rail networks, expressways, and international airports. In cities like Nagpur, residential prices have reached between ₹4,500 and ₹6,500 per square foot. Buyer preferences are also evolving, with a growing emphasis on modern amenities, connectivity, and proximity to essential services.

Recent data through 2026 highlights Bhubaneswar as a prominent emerging hub, seeing significant growth across residential, warehousing, and retail sectors. The city’s rise is supported by expanding MSME ecosystems, a growing services sector, skilled manpower, and the presence of Global Capability Centres (GCCs). In the logistics sector, Bhubaneswar emerged as a major player in 2025, contributing nearly half of the 5.3 million square feet of warehousing transactions recorded across six key Tier-2 markets. The city is also contributing to the expansion of organized retail within the broader Tier-2 shopping-centre stock.