Cities like Jaipur, Guntur, Gandhi Nagar and Bhubaneshwar have seen price rise between 15% and 65% in the last one year.
The weighted price of new launch projects in top 30 tier II cities rose up to 65% between 2023 and October 2024 with 25 cities witnessing a rise in prices while 5 cities seeing a decline, according to a report by data analytics firm PropEquity.
Cities like Bhopal, Mohali, Sonepat, Trivandrum and Mysore saw housing price fall by up to 26%, according to the report.
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Commenting on the report, Samir Jasuja, Founder & CEO, PropEquity, said, “Tier II cities have seen renewed interest from developers, corporates, financial institutions and investor community. The cheap availability of land in these cities followed by massive development of connectivity infrastructure and strong demand have led to increased supply of premium and luxury housing from not just incumbent developers but new entrants cashing in on the potential of these cities as growth centres and employment hubs driving the next phase of India growth story. Cities like Jaipur, Guntur, Gandhi Nagar and Bhubaneshwar have seen price rise between 15% and 65% in the last one year.”
In North India, Jaipur saw the highest rise in weighted average price of new launch projects at 65% from Rs 4240 per sq. ft. to Rs 6979 per sq. ft. between 2023-October 2024. This was followed by Indore (20%) and Dehradun (14%). Sonepat at 26% witnessed the highest fall in price followed by Mohali (8%) and Bhopal (5%).
While Agra, Chandigarh and Bhiwadi saw 59%, 34% and 25% growth in prices respectively, the new launches in these cities were very few (between 3-5 projects) during this period.
In Southern India, Guntur saw weighted average price of new launch projects rise by 51% to Rs 5169 per sq. ft. between 2023 and October 2024 followed by Mangalore (41%), Visakhapatnam (29%). Mysore and Trivandrum witnessed fall in prices at 14% and 4%, respectively.
In Western India, Gandhi Nagar saw weighted average price of new launch projects rise by 19% to Rs 4844 per sq. ft. between 2023 and October 2024, followed by Surat (14%) and Nagpur (12%).
In Eastern India, Bhubaneshwar saw weighted average price of new launch projects rise by 15% to Rs 7731 per sq. ft. between 2023 and October 2024 and Raipur by 14% to Rs 3810 per sq. ft.
Goa is the only city amongst 30 tier II cities that has seen weighted average launch price cross the Rs 10,000 per sq. ft. threshold.
Prices in cities like Vijayawada, Gandhi Nagar, Surat, Vadodara, Ahmedabad and Raipur continue to stay below the Rs 5000 per sq. ft. Mark.
Madhur Gupta, CEO of Hero Realty, stated that the surge in job opportunities, reduced cost of living, and the availability of affordable housing are significant factors propelling the demand and supply of real estate in Tier 2 cities, bolstered by robust buyer sentiment. “The media plays a pivotal role in this trend by showcasing enhanced lifestyles and gated community amenities, thereby fostering new aspirations in Tier 2 and Tier 3 cities and stimulating demand growth. In response to this desired lifestyle and increased affordability, developers are introducing higher-priced inventory, driven by the growth of sectors such as IT/ITES and smart city initiatives. Chandigarh has emerged as a leader, spearheading market size expansion among the leading Tier 2 cities,” he added.
