Residential prices surge 63% in 11 Indian Tier-2 cities over five years

According to a joint Confederation of Indian Industry and Knight Frank India analysis, residential prices in 11 Tier-2 and Tier-3 cities climbed 63% between 2016 and 2026, double the pace of India's eight biggest metros. Cities including Bhopal, Bhubaneswar, Chandigarh Tricity, Goa, Indore, Jaipur, Kochi, Lucknow, Nagpur, Visakhapatnam and Coimbatore recorded an average 8% yearly rise, while metros saw about 4% CAGR. The surge is linked to a rise in infrastructure allocation—from 39% to 55% of capital spending—and a three-year PPP pipeline of 852 projects valued at ₹17 lakh crore.

Logistics leasing and organized retail space have also expanded, with six of the highlighted cities accounting for nearly half of Tier-2 warehousing transactions. Demographic trends show faster population growth outside the top metros, supporting demand. The report warns that continued price gains will hinge on converting connectivity into lasting economic activity, emphasizing the need for jobs, enterprise and livable urban conditions. Shishir Baijal of Knight Frank India stresses that investors must be selective and understand each market’s underlying drivers.