As life in India’s big cities becomes more challenging due to crowding and rising costs, smaller cities are emerging as attractive alternatives. Tier-2 and Tier-3 cities are not only gaining attention but are also outpacing traditionally dominant markets like Gurgaon and Noida in terms of property growth. The rise in real estate prices in these smaller cities is no longer confined to regular homes, as luxury properties are also being snapped up. Whether it’s a flat, villa, or a plot of land, these cities are seeing a rapid increase in property value.
This trend has accelerated post-COVID, with more people moving away from crowded metropolitan areas toward quieter, more affordable cities. As a result, real estate developers are now prioritizing smaller cities, launching projects at a fast pace to meet the growing demand.
Tier-2 and Tier-3 Cities Witness Unprecedented Growth
Cities like Faridabad, Lucknow, Ludhiana, Chandigarh, Indore, Dehradun, Haldwani, Ajmer, Jaipur, and Vrindavan are now at the forefront of this property boom. Once considered laid-back and slow to develop, these cities have seen rapid infrastructure improvements over the past decade, and the growth has only surged after the pandemic. While Delhi-NCR continues to grow, these smaller cities have become new hubs of development and progress.
Companies Shift Focus to Smaller Cities
It’s not just homeowners flocking to smaller cities—businesses and companies are also recognizing the benefits of these locations. The availability of talent, combined with lower operational costs, makes these cities a lucrative option. Cities like Faridabad, Jaipur, Coimbatore, and Indore are now seeing the development of IT parks, special economic zones, and industrial areas. Government initiatives like the Smart City Mission and AMRUT have further boosted infrastructure, making these locations ideal for both living and working.
Metro-Level Amenities Now Available in Smaller Cities
Another factor driving the shift to smaller cities is the availability of modern facilities, much like those found in metros. Whether it’s malls, entertainment centers, top schools, or healthcare facilities, these cities now offer all the amenities that people seek for a better quality of life. Improved connectivity with larger cities has also made them even more appealing to homebuyers.
According to Mohit Goyal, Managing Director of Omaxe Ltd, “Tier-2 and Tier-3 cities are evolving into urban centers, driving significant changes in the real estate landscape. Cities like Ludhiana, Chandigarh, Lucknow, Vrindavan, and Indore have seen property values rise dramatically. As developers, we are now shifting focus towards these smaller cities instead of metros.”
Lower Costs, Better Lifestyle Drive Property Demand
The dream of owning property without the high costs of metro cities is a major factor fueling demand. The affordability of land and homes in these smaller cities has prompted developers to invest heavily. New malls, office spaces, and residential colonies are being developed, transforming the entire urban landscape of these areas.
Kushagr Ansal, Director of Ansal Housing, states, “The rising demand for land and houses in smaller cities has prompted large-scale investments from developers. This is resulting in new malls and office spaces, which are changing the face of these cities.”
Small Cities Offer High Returns on Low Investments
Many smaller cities, such as Chandigarh, Mohali, and Ludhiana, offer strong returns on lower investments. With the property market booming in these areas, both builders and buyers are benefiting. Developers are seeing high demand for projects, while customers are enjoying high-quality properties at affordable prices.
As CEO of Tirasya Estate, Vansh Kataria explains, “As big cities become more expensive, smaller cities are becoming better options. They offer a good lifestyle without the heavy costs.” Piyush Kansal, Executive Director of Royal Estate Group, adds that cities like Chandigarh, Mohali, and Ludhiana provide excellent returns on low investments, benefiting both customers and developers.
With such rapid growth, the property boom in India’s smaller cities is showing no signs of slowing down. These emerging urban centers are offering not only affordable housing but also high-quality living and lucrative investment opportunities for the future.
