Tier-II cities lead the charge in property appreciation, surpassing metros: Report

KOLKATA, July 10: India’s real estate sector is undergoing a dramatic transformation as Tier-II cities outshine metros in property appreciation, according to the latest Magicbricks report.
The average capital appreciation in Tier-II cities has surged to 17.6 per cent, notably ahead of Delhi’s 15.7 pc and the national capital’s 11.1 pc. This shift signals a growing preference among investors and homebuyers for emerging urban centers, where the potential for robust returns is increasingly evident.
Northern India stands out in this trend, with Kanpur and Lucknow leading at 24.53 pc and 22.61 pc year-on-year (YoY) capital appreciation respectively. These cities, along with others like Dehradun, Jaipur, and Patna, are experiencing substantial growth, driven by a combination of affordability and strong demand.
For instance, the average price per square foot in Lucknow is Rs 6,394, Kanpur Rs 6,986, Dehradun Rs 5,653, and Jaipur Rs 5,654 – significantly lower than Delhi’s Rs18,618 per sq ft. This price gap offers an accessible entry point for both end-users and investors seeking value and upside potential, the study said.
Extensive infrastructure development, upgrades in roads, metro connectivity, airports, and industrial corridors have dramatically improved accessibility and livability, making these cities more attractive.
Affordability in lower property prices compared to metros enable a wider demographic to consider homeownership, fuelling demand and capital growth.
Rising demand for quality housing: young professionals, first-time buyers, and families are increasingly drawn to life and less congestion.
The emergence of new industries, IT/ITeS hubs, and business parks is creating jobs and stimulating residential and commercial real estate demand.
Reverse migration and urban decentralization in the post-pandemic era has seen professionals returning to their hometowns or seeking opportunities in less crowded cities, further boosting demand.
Managing director, Royal Green Realty Yashank Wason said as highlighted by the recent Magicbricks report, Tier-II cities are demonstrating superior property price appreciation compared to metropolitan areas, with many locations achieving significant double-digit growth. This acceleration is attributable to improvements in infrastructure, increased industrial investment, and a discernible preference for an enhanced quality of life beyond densely populated metros.
The confluence of accessible price points, strong connectivity, and favourable government initiatives is rendering Tier-II cities exceptionally attractive to prospective homebuyers and investors.
“Our assessment indicates the continuation of this trend, as these cities present compelling value propositions, robust investment returns, and a conducive environment for sustainable urban development”, he said.
Director of Mapsko Group Rahul Singla said, “The recent Magicbricks report underscores a significant shift – Tier-II cities are now leading the charge in property price appreciation, even outpacing
metro markets with double-digit growth in several pockets.”
This surge, he said, is driven by a blend of improved infrastructure, rising employment opportunities in smaller cities, digital penetration, and post-pandemic lifestyle shifts that favour affordability and quality
living.
As remote work becomes more mainstream and urban congestion grows, homebuyers and investors alike are turning to Tier-II cities for better value and long-term potential. “The momentum here signals a structural shift in India’s real estate landscape”, said Singla.
These dynamics are not only attracting local buyers but also investors from Tier-I cities, who see Tier-II markets as cost-effective alternatives with high appreciation potential. The robust growth in both residential and commercial segments underscores a broader rebalancing of India’s real estate narrative, with Tier-II cities now at the forefront of expansion and opportunity.
(UNI)

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