Residential property launch prices across India’s top 10 Tier II cities have witnessed a rise up to 94% in new launch projects in the last five fiscal years ending 2023-24 due to growing consumer confidence, a buoyant job market and robust infrastructure development, according to data analytics firm PropEquity.
In its extensive research, PropEquity reported a double-digit surge in launch prices in 24 out of 30 Tier II cities in the last 5 fiscal years. However, the remaining six recorded a single digit price appreciation.
Interestingly, the data showed that out of these 30 cities, the top 10 cities witnessed an increase in residential property launch prices ranging from 54 percent to 94 percent (since FY2020 to FY2024), with Agra in the North Zone accounting for the highest rise of 94 percent.
Goa (90%), Mangalore (56%) and Indore (72%) reported the highest surge in the West, South and Central/East Zones respectively.
Commenting on the data, Samir Jasuja, Founder and CEO at PropEquity, said, “Tier II cities have witnessed a significant price appreciation primarily due to increased demand, as absorption has been significantly higher than new launches in the last five fiscal years. The rise in consumer confidence fueled by economic growth, a boost in connectivity, infrastructure development and strong job markets has driven up prices in double digits in the majority of these cities.”
Jasuja further added, “With the increased interest of home seekers and investors, Tier II cities have also attracted reputed developers in the last five fiscal years. The trend suggests the growing importance of these cities in India’s economic and socio-cultural development.”
Tier 2 cities offer a lower cost of living, making them attractive for homebuyers seeking value. This affordability fuels demand for residential properties, compared to Tier 1 cities. In addition, enhanced connectivity brings amenities like educational institutions and healthcare facilities closer, making tier 2 cities more attractive for families and young professionals.
Similarly, Mohit Jain, Managing Director, Krisumi Corporation says, “The demand for luxury housing has seen a prominent upsurge nationwide. The luxury segment never witnessed sales at such a breakneck speed. Buyers are prioritizing comfortable living areas and dedicated workspaces. Builders have been able to sell their projects valuing thousands of crores within a few days as demand surpassed supply. Economic growth, higher supply from reputed branded builders and a surge in appetite for home ownership are some of the key growth drivers. This positive outlook is expected to result in a surge of new residential projects, in the luxury segment, catering to the growing number of discerning buyers and investors.
Residential Property Prices in Top 10 Tier II Cities for – Agra, Goa, Ludhiana, Indore, Chandigarh, Dehradun, Ahmedabad, Bhubaneshwar, Mangalore and Trivandrum – reported double digit growth ranging from 54% to 94% between FY 2019-20 and FY 2023-24.
Property Prices in West Zone- Goa, Ahmedabad, Nagpur, Gandhi Nagar, Vadodara, Nashik and Surat - reported double digit growth ranging from 45% to 90% between FY 2019-20 and FY 2023-24.
Property Prices in North Zone –Agra, Ludhiana, Chandigarh, Dehradun, Jaipur, Mohali and Lucknow - reported double digit growth ranging from 38% to 94% between FY 2019-20 and FY 2023-24.
Property Prices in South Zone – Mangalore, Trivandrum, Mysore, Kochi, Coimbatore and Visakhapatnam - reported double digit growth ranging from 11% to 57% between FY 2019-20 and FY 2023-24. However, Vijayawada saw price appreciation of only 7%
Property Prices in East and Central Zone – Indore, Bhubaneshwar, Bhopal and Raipur - reported double digit growth ranging from 26% to 72% between FY 2019-20 and FY 2023-24.
PropEquity captures real estate data for RERA approved projects in 44 Indian Cities including 14 Tier I cities and 30 Tier II Cities.
30 Tier II cities include – Amritsar, Mohali, Ludhiana, Chandigarh, Panipat, Dehradun, Bhiwadi, Sonepat, Jaipur, Agra, Lucknow, Bhopal, Indore, Visakhapatnam, Vijayawada, Guntur, Goa, Mangalore, Mysore, Coimbatore, Kochi, Trivandrum, Raipur, Bhubaneshwar, Ahmedabad, Gandhi Nagar, Vadodara, Surat, Nashik and Nagpur.
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