Tier-2 cities in India are experiencing remarkable growth in real estate markets, driven by economic diversification, rising consumer demand, and reverse migration trends accelerated by the pandemic, according to Housing.com’s ‘The Bharat in India’ report. These cities are quickly catching up with their Tier-1 counterparts due to their increasing economic potential, which has attracted more residents.

The economic dynamism in tier-2 cities has significantly impacted the real estate market, particularly in retail, warehousing, and residential segments. The growing interest from national and international brands has led to the development of high-street areas and premium retail spaces. For example, Kochi, Kerala, now boasts the largest mall in India, highlighting the evolving retail landscape.

E-commerce activity is also on the rise, prompting companies to expand their presence in these cities. A notable example is Amazon leasing approximately 6.1 lakh sq ft of space for a fulfillment center in Lucknow, its largest in India. Additionally, the development of industrial corridors and the enhancement of airport cargo handling facilities have fueled growth in the warehousing sector.

Housing markets in Tier-2 cities have seen increased activity, as indicated by Housing.com’s Property Buy index, which tracks high-intent homebuyer activity. The index shows that Tier-2 cities are outperforming the top-eight metros.

Dhruv Agarwala, Group CEO of Housing.com, commented on the report, noting that the real estate narrative in India is evolving rapidly. Cities like Kochi, Jaipur, Goa, and Chandigarh Tri-city are emerging as new growth powerhouses. The Property Buy Index underscores their growing prominence, with Tier-2 cities surpassing the top eight metros by 88 points, highlighting their increasing significance and potential in the service sector.