Housing prices in 23 major Tier II cities across India saw significant increases in 2023, driven by renewed interest from developers, corporates, and investors. According to a recent report by real estate data firm PropEquity, the weighted average prices of housing projects launched between January and September this year rose by as much as 65% in some cities, signaling a shift in market dynamics.
Jaipur, in particular, experienced the highest price jump, with average prices soaring 65% to Rs 6,979 per square foot, up from Rs 4,240 per square foot in 2022. This sharp increase reflects the growing demand for premium housing in the city, which has seen enhanced connectivity infrastructure and an influx of investment. Samir Jasuja, Founder and CEO of PropEquity, noted that Tier II cities have become attractive hubs for developers and financial institutions, fueling the housing market boom. The report also highlights price increases in several other Tier II cities across India. In North India, Agra saw a 59% rise, while Chandigarh and Bhiwadi recorded increases of 34% and 25%, respectively. Other cities like Indore, Dehradun, and Lucknow also saw growth, albeit at a lower rate. However, not all Tier II cities shared this upward trend. Some cities experienced declines in housing prices during the same period. For example, Bhopal saw a 5% decrease, while Mohali and Sonepat recorded drops of 8% and 26%, respectively.
In South India, Guntur experienced a remarkable 51% rise in housing prices, followed by Mangalore (41%) and Visakhapatnam (29%). Despite this, cities like Trivandrum and Mysore saw price drops of 4% and 14%, respectively. Western India also saw significant growth, with Gandhi Nagar’s housing prices rising by 19%, and Surat, Nagpur, and Vadodara seeing moderate increases between 10% and 14%. In East India, Bhubaneswar and Raipur saw their prices rise by 15% and 14%, respectively. Experts point to a growing demand for quality living spaces in these emerging markets as a key factor behind the price appreciation. Yashank Wason, Managing Director of Royal Green Realty, noted that the increase in demand is leading to more development of premium and luxury housing. Kirthi Chilukuri, MD & Founder of Stonecraft Group, added that the price rise reflects the growing confidence in Tier II cities as both residential and investment destinations. As the real estate landscape continues to evolve, these findings suggest that while Tier II cities are becoming increasingly attractive for buyers and investors, the situation in smaller towns remains more volatile, with some experiencing price declines.
