Goa, Kanpur, Lucknow lead Tier 2 real estate boom in India
Tier 2 cities in India, led by Kanpur, Lucknow, and Goa, are outperforming Tier 1 cities in property appreciation, with infrastructure expansion and rising demand driving a 17.6% average increase.
- Apr 23, 2025,
- Updated Apr 23, 2025 2:39 PM IST
Real estate markets in Tier 2 cities across India are showing remarkable capital appreciation, significantly outperforming their Tier 1 counterparts. According to the latest data from Magicbricks, a notable real estate platform, the average capital appreciation in these cities has reached 17.6%, surpassing Delhi's 15.7% gain.
Among the leaders, Kanpur and Lucknow have reported substantial year-on-year appreciation rates of 24.53% and 22.61%, respectively. This surge is attributed to the expanding infrastructure, growing demand, and the relative affordability of these locations compared to the national capital.
Goa has emerged as a standout performer in western India, recording an extraordinary year-on-year capital appreciation of 66.37%. This makes it one of the most dynamic markets in the region. The average price per square foot in Goa has reached Rs 13,290, still significantly lower than Mumbai's Rs 28,921. Increased demand for second homes, robust rental yields, and tourism-related investments drive such impressive growth.
Prasun Kumar, Chief Marketing Officer at Magicbricks, highlighted Goa's position as a leading market, stating, "Tier 2 cities in North India are no longer secondary markets—they’re becoming prime investment destinations." Kumar also noted the rising investment potential in these regions due to expanding infrastructure and modern housing supply.
In the northern part of India, Tier 2 cities such as Lucknow, Kanpur, and Dehradun present considerable investment opportunities due to their comparatively lower real estate prices. While Delhi's average price stands at Rs 18,618 per square foot, Lucknow, Kanpur, and Dehradun offer more affordable options at Rs 6,394, Rs 6,986, and Rs 5,653, respectively.
These cities are attracting young professionals and first-time homebuyers, contributing to their rapid growth. The northern Tier 2 markets are benefiting from strategic infrastructure developments and a rising influx of new residents, further boosting their appeal as prime investment destinations.
In the southern and eastern regions, Tier 2 cities are similarly thriving. Kochi in South India has recorded a 16.55% capital appreciation, substantially higher than Chennai's 11.9%. Meanwhile, Patna in Eastern India has demonstrated a 15.12% appreciation rate, marking it as a high-growth market. These figures underscore the increasing stature of Tier 2 cities in these regions as viable investment alternatives to more traditional metropolitan hubs. The consistent growth is supported by infrastructure enhancements and a burgeoning demand for affordable housing solutions.
Overall, Tier 2 cities across India are not just emerging as affordable alternatives but are positioning themselves as prime investment hubs thanks to expanding infrastructure, increasing demand from young buyers, and attractive investment returns. The emphasis on developing modern housing and supporting infrastructure continues to make these cities attractive to investors seeking higher yields and value growth.
With many Tier 2 cities outperforming established urban centres, they are set to play a crucial role in shaping the future landscape of India's real estate market.
Real estate markets in Tier 2 cities across India are showing remarkable capital appreciation, significantly outperforming their Tier 1 counterparts. According to the latest data from Magicbricks, a notable real estate platform, the average capital appreciation in these cities has reached 17.6%, surpassing Delhi's 15.7% gain.
Among the leaders, Kanpur and Lucknow have reported substantial year-on-year appreciation rates of 24.53% and 22.61%, respectively. This surge is attributed to the expanding infrastructure, growing demand, and the relative affordability of these locations compared to the national capital.
Goa has emerged as a standout performer in western India, recording an extraordinary year-on-year capital appreciation of 66.37%. This makes it one of the most dynamic markets in the region. The average price per square foot in Goa has reached Rs 13,290, still significantly lower than Mumbai's Rs 28,921. Increased demand for second homes, robust rental yields, and tourism-related investments drive such impressive growth.
Prasun Kumar, Chief Marketing Officer at Magicbricks, highlighted Goa's position as a leading market, stating, "Tier 2 cities in North India are no longer secondary markets—they’re becoming prime investment destinations." Kumar also noted the rising investment potential in these regions due to expanding infrastructure and modern housing supply.
In the northern part of India, Tier 2 cities such as Lucknow, Kanpur, and Dehradun present considerable investment opportunities due to their comparatively lower real estate prices. While Delhi's average price stands at Rs 18,618 per square foot, Lucknow, Kanpur, and Dehradun offer more affordable options at Rs 6,394, Rs 6,986, and Rs 5,653, respectively.
These cities are attracting young professionals and first-time homebuyers, contributing to their rapid growth. The northern Tier 2 markets are benefiting from strategic infrastructure developments and a rising influx of new residents, further boosting their appeal as prime investment destinations.
In the southern and eastern regions, Tier 2 cities are similarly thriving. Kochi in South India has recorded a 16.55% capital appreciation, substantially higher than Chennai's 11.9%. Meanwhile, Patna in Eastern India has demonstrated a 15.12% appreciation rate, marking it as a high-growth market. These figures underscore the increasing stature of Tier 2 cities in these regions as viable investment alternatives to more traditional metropolitan hubs. The consistent growth is supported by infrastructure enhancements and a burgeoning demand for affordable housing solutions.
Overall, Tier 2 cities across India are not just emerging as affordable alternatives but are positioning themselves as prime investment hubs thanks to expanding infrastructure, increasing demand from young buyers, and attractive investment returns. The emphasis on developing modern housing and supporting infrastructure continues to make these cities attractive to investors seeking higher yields and value growth.
With many Tier 2 cities outperforming established urban centres, they are set to play a crucial role in shaping the future landscape of India's real estate market.