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India's real estate market in 2024 saw a major shift, with Tier 2 and 3 cities emerging as key players in land acquisitions (44% of 3,294 acres) and housing demand. According to a report published by Liases Foras, sales surged 23% YoY to 6,81,138 units, with the market valued at INR 7.5 trillion (43% growth). Luxury housing dominated (71% of sales value), with 1-2 crore units rising by 52% and ultra-luxury homes (above 2 crore) growing by 73%. Infrastructure projects like Gati Shakti are fueling growth, especially in affordable housing hubs like Ahmedabad, Pune, and Indore. With INR 22.5 trillion market value, Tier 2 and 3 cities are now central to India's real estate expansion.
India's real estate market in 2024 witnessed a notable transformation, with Tier 2 and 3 cities emerging as key players in land acquisitions and housing demand. A report by Liases Foras revealed that 44% of the 3,294 acres acquired by developers were concentrated in these cities, signaling a strategic investment shift. This trend highlights their growing importance in shaping the sector's long-term growth, driven by urban expansion, improved infrastructure, and increasing demand for affordable and premium housing. Advertisement
Housing sales surged significantly, reaching 6,81,138 units across 60 cities, reflecting a 23% year-on-year (YoY) increase. The primary builder's market recorded a sales value of INR 7.5 trillion, marking a 43% growth, fueled by sustained demand across various segments. Notably, luxury and ultra-luxury housing played a dominant role, contributing 71% of total sales value. The demand for high-end properties remained strong, with sales of apartments priced between INR 1-2 crore rising by 52%, totaling 1,32,532 units. The ultra-luxury segment, comprising properties priced above INR 2 crore, saw an even steeper increase of 73%, indicating growing confidence among developers in catering to high-net-worth individuals.
While metro cities continue to be the epicenter of luxury and premium housing, the rise of Tier 2 and 3 cities has created a more balanced market. These emerging hubs are playing a crucial role in mid-range and affordable housing demand, driven by their evolving status as academic, industrial, and logistics centers. Cities such as Lucknow, Jaipur, and Bhubaneswar are experiencing steady price appreciation, reinforcing their potential as investment hotspots.
The rapid urbanization of these cities is being further accelerated by government initiatives like the Prime Minister's Gati Shakti mission, which is improving connectivity between satellite towns and major metropolitan regions. Enhanced infrastructure and better accessibility are unlocking new opportunities for real estate expansion, making these cities increasingly attractive for both developers and buyers.
The affordable housing sector remains a significant driver of growth, with the Priority Sector Lending (PSL) category-comprising homes priced under INR 30 lakh-and the INR 30-50 lakh segment attracting first-time buyers and investors alike. Cities such as Ahmedabad, Pune, Indore, and Coimbatore are leading in affordable housing development, expanding homeownership opportunities for a broader demographic.
With India's real estate sector now valued at INR 22.5 trillion and contributing 7.2% to the country's GDP, Tier 2 and 3 cities are solidifying their role as engines of growth. Their increasing contribution to land acquisitions, housing demand, and infrastructure development is reshaping India's urban landscape, ensuring long-term sectoral expansion and a more inclusive housing market.
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