Synopsis
A recent report reveals that Tier 2 and 3 cities in India accounted for 44 percent of land acquisitions in 2024, reflecting a significant shift in real estate investment trends. The report highlights the growth in housing sales and the rising demand for affordable and luxury properties in these emerging urban hubs.Key Takeaways
- 44% of land acquisitions were in tier 2 and 3 cities.
- Housing sales reached 681,138 units in 2024.
- Sales value grew by 43% year-on-year.
- Luxury housing contributed 71% of total sales value.
- Steady price appreciation in cities like Lucknow and Jaipur.
Mumbai, March 7 (NationPress) The future of India’s real estate is being influenced by Tier 2 and 3 cities, which represented 44 percent of the 3,294 acres of land acquired by developers in the previous year, according to a recent report released on Friday.
This indicates a significant shift in investment focus, as these cities are recognized for their potential to drive long-term growth in the sector.
In 2024, housing sales totaled 681,138 units across 60 cities, marking an impressive 23 percent year-on-year increase, as per the report by CREDAI in collaboration with real estate research firm Liases Foras.
The primary builder’s market achieved a sales value of Rs 7.5 lakh crore, reflecting an astonishing 43 percent year-on-year growth, fueled by sustained demand across various segments.
Luxury and ultra-luxury housing have emerged as significant contributors, accounting for 71 percent of the total sales value, driven by larger ticket sizes and a favorable supply-demand dynamic in premium markets.
Sales of properties priced between Rs 1-2 crore surged by 52 percent, with 132,532 apartments sold, while the ultra-luxury segment (above Rs 2 crore) saw an even more remarkable increase of 73 percent, reflecting developers’ confidence in targeting high-net-worth individuals.
With the real estate sector currently valued at Rs 22.5 lakh crore and contributing 7.2 percent to India’s GDP, it is clear that Tier 2 and 3 cities are evolving into growth engines, offering both affordability and high-value transactions that redefine India’s urban landscape, as stated in the report.
“These cities now account for almost half of all land acquisitions by developers, indicating a major shift in investment trends. For example, Nashik’s evolution from a pilgrimage town to a vibrant urban center illustrates the potential of these cities to transform India’s housing market,” said Manoj Gaur, Chairman of CREDAI.
While metro cities remain dominant in luxury and premium housing sales, the rise of Tier 2 and 3 cities has fostered a more balanced market dynamic, where mid-range and affordable properties are crucial in driving demand.
Cities such as Lucknow, Jaipur, and Bhubaneswar are experiencing steady price appreciation, reinforcing their market strength, the report added.
Boman Irani, President of CREDAI, noted that as these cities evolve into economic and industrial hubs, there is a growing demand for affordable and mid-segment housing.
