New Launch - India Real Estate Report 2026.
Residential prices across 11 emerging Tier-2 markets have risen 63 percent over the past five years. This compares with 42 percent growth across the top eight cities.
The markets include Goa, Lucknow, Nagpur, Visakhapatnam, and Coimbatore. Average prices in these markets range from Rs 4,500 to Rs 13,500 per sq ft.
This is according to a report by CII-Knight Frank India, released on September 18.
About the Report
The report is titled 'India's Next Real Estate Markets'. It covers 11 emerging Tier-2 cities: Bhopal, Bhubaneswar, Chandigarh Tricity, Goa, Indore, Jaipur, Kochi, Lucknow, Nagpur, Visakhapatnam, and Coimbatore.
These cities recorded an average compound annual growth rate of 8 percent between 2016 and 2026.
This compares with 4 percent across the top eight cities: Mumbai, Bengaluru, Delhi-NCR, Hyderabad, Chennai, Pune, Ahmedabad, and Kolkata. The report was released at the CII Real Estate Conference in the capital.
Knight Frank said the gap has widened over the past five years. Residential prices across the 11 markets rose 63 percent between 2021 and 2026. This compares with 42 percent growth across the top eight cities.
Changing Buyer Preferences
The report noted that the pandemic changed consumer expectations of housing. It said post-Covid changes in household finances and hybrid working increased flexibility over residential locations.
Buyers in Tier-2 cities are moving away from standalone buildings. They are increasingly choosing integrated, amenity-led communities.
Residential demand is also shaped by each city's economic role. A technology and services centre may see demand around employment corridors.
An industrial city may see housing develop around manufacturing clusters. A tourism market may see demand for premium homes and second residences.
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Growth Projections and Commercial Activity
India's real estate sector output is projected to reach $5.8 trillion by 2047. Tier-2 and Tier-3 cities are estimated to contribute 25-30 percent of this, or $1.4-1.7 trillion.
- Tier-2 cities recorded 11.2 million sq ft of warehousing leasing in 2025
- Six emerging markets accounted for 5.3 million sq ft of this
- 24 Tier-2 cities held 36 million sq ft of India's 134 million sq ft organised shopping-centre stock in 2025
Also Read: Kamathipura Redevelopment Deal Signed in Mumbai
What Knight Frank's Chairman Said
Shishir Baijal is international partner, chairman, and managing director of Knight Frank India. He said India's real estate growth is broadening beyond traditional metropolitan centres.
He said the investable opportunity across Tier-2 and Tier-3 cities will be shaped by more than infrastructure creation alone.
He added it will also depend on their ability to convert connectivity into sustained economic activity.
He said cities that bring together employment, enterprise, population growth, consumption and urban capacity will build deeper real estate markets.
He added that this represents a wider opportunity for investors and developers, but one that requires greater selectivity.
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