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From Megacities to Tier 2 Gems: The Evolution of India’s Real Estate Landscape


By: Prasoon Chauhan, Founder & CEO, Aurika Homes
India, the fastest-growing major economy, is on the path of becoming a 5 trillion dollar economy by 2026-27. With the real estate sector as the key driver behind this growth, tier 1 cities support this ambitious goal. The cities possess integrated residential developments, commercial offices, and retail and hospitality buildings, prompting investors and developers to explore new avenues. As urbanization accelerates, the focus is gradually shifting to the upcoming urban centres. Tier 2 cities in states like Uttar Pradesh are witnessing a real estate boom, playing a pivotal role in shaping the nation’s growth narrative. Notably, key developments are underway in cities like Moradabad, Bareilly, Ayodhya, Yamna Expressway, Noida & Greater Noida, coupled with rapid urbanization, infrastructure development, and enhancing the quality of life for both businesses and residents.
Building on this momentum, a recent report by PropEquity shows how the residential property prices in India’s top 10 tier 2 cities have skyrocketed by 94% in the last five years. Creating a demand beyond the metropolitan areas, several factors like improved connectivity, economic expansion, flourishing job market, and consumer confidence have contributed to this unprecedented growth in property prices. Moreover, government initiative like Smart City Mission has triggered rapid infrastructural development in these cities, making them attractive for property investments. The policy making initiatives by the government on improving transportation connectivity, communication infrastructure and energy systems bridging the urban and rural areas have significantly improved economic trade. Setting up well-established regional airports and National Highways enhancing connectivity has led to Real Estate price appreciation and improved rental yields.
Additionally, these factors have brought the presence of reputed developers into these cities, further strengthening the real estate market. As India is expected to undergo urbanization at a rate of approximately 50% by 2050, attention is increasingly turning towards tier 2 cities, positioning them as the next big opportunity for real estate expansion. A notable trend among potential homebuyers in tier 2 cities is the preference for luxury residential properties. This shift is accompanied by a growing emphasis on amenities that enhance the quality of life. Recognizing these evolving preferences, developers are actively integrating such amenities into their projects, aligning with the changing lifestyle aspirations of residents and emerging as a distinguished example of luxury living in these cities. Through lavish interiors and smart living features, these high-end projects cater to the needs of affluent buyers who seek to live an opulent lifestyle without compromising the conveniences of urban life.
Furthermore, positioned away from the city’s buzzing environment, developers bring a breath of fresh air to these luxury residences, immersing the residences in a tapestry of lush greenery, meticulously landscaped gardens, and thoughtfully planned recreational amenities. From serene entrance parks with highlighted sculptures to tranquil walking trails, every corner of these projects lets the residents explore, unwind, and connect with nature. For those seeking leisure and sporting activities, the projects also comprise badminton courts, half basketball courts, cricket net practice pitch, amphitheatre, meditation area, and multipurpose halls, offering many benefits to the buyers. With a blend of serenity and high-end amenities, these luxury residences are reshaping the definition of real estate in tier 2 cities, making them an attractive choice for those seeking a refined and exclusive lifestyle.
Hence, amidst the strategic development and infrastructural growth, developers are recognizing the potential of tier 2 cities. Developers are seeing a growing demand for upscale living spaces as buyers are looking for homes that provide a holistic living experience, including wellness centres, landscaped gardens, smart home features, and sustainable design elements. As the narrative of India’s real estate story continues to unfold, tier 2 cities stand as pioneers, unlocking new gateway of prosperity and progress.
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