The Billionaire Boom: Why India’s Tier II and III Cities are Attracting Luxury Developers

New Delhi, February 26, 2025: India’s Tier II and Tier III cities are witnessing a remarkable rise in High Net Worth Individuals (HNIs) and ultra-HNIs, driven by booming entrepreneurship, flourishing Micro, Small & Medium Enterprises (MSMEs), and increased startup activity. Business families, industrialists, and professionals in these cities are accumulating wealth at an unprecedented pace, creating a surge in demand for high-end residences. Unlike earlier trends where luxury living was synonymous with metro cities, affluent buyers in smaller cities now seek homes that match global standards—featuring premium architecture, smart automation, high-end amenities, and exclusive community living. This shift is driving luxury real estate developers to expand beyond traditional metro markets.

According to ANAROCK’s recent Consumer Sentiment Survey, 26 per cent of property investors are now favoring Tier II and Tier III cities, highlighting a shift in real estate investment trends. Factors such as a burgeoning population, swift urbanization, and enhanced infrastructure are drawing not only new residents but also developers keen to explore the vast opportunities these cities present.

Further, the rapid expansion of infrastructure in Tier II and Tier III cities is a key catalyst for luxury real estate growth. Enhanced connectivity through new airports, expressways, and metro networks is making these cities more accessible, boosting their investment appeal. Additionally, Smart City initiatives are improving urban infrastructure with better roads, drainage, public transport, and digital connectivity, enhancing the overall quality of life. With world-class infrastructure taking shape, luxury homebuyers are increasingly drawn to these emerging hubs for their convenience and superior livability.

Yash Miglani, Managing Director, Migsun Group, says, “India’s real estate growth story is no longer confined to metros. Several tier-2 cities are witnessing a surge in luxury home demand. Rising incomes, infrastructure projects, and aspirational buyers are fueling this trend. At Migsun, we look forward to strategically entering these markets with premium developments that offer world-class amenities, smart homes, and community living. We believe that the future of luxury real estate lies in these emerging cities, where buyers seek exclusivity, security, and a high standard of living at a competitive price.”

Piyush Kansal, Executive Director, Royale Estate Group, says, “Tier II and III cities are undergoing rapid urban transformation, driven by government initiatives and private sector investments in connectivity. The development of highways, airport expansions, and emerging business and industrial hubs are reshaping these regions. These advancements are not only strengthening local economies but also enhancing accessibility and livability, paving the way for sustained growth in the real estate sector.”

One of the biggest advantages Tier II and III cities offer luxury developers is the significantly lower cost of land acquisition compared to metro cities. This allows developers to create expansive, high-end residential projects with premium amenities that are often compromised in space-constrained metros.

With ample land availability, luxury developments in these cities can incorporate wide roads, open spaces, and sustainable infrastructure, offering an enhanced living experience.

Neeraj Sharma, MD, Escon Infra Realtors says, “Tier II and III cities are bridging the gap between affordability and luxury. Homebuyers here are willing to invest in opulence, driven by the rising disposable income of business owners and professionals. Unlike metros, where space constraints limit luxury, these cities allow developers to create expansive projects with larger homes, premium clubhouses, and green landscapes. Hence, we see immense potential in crafting luxury spaces that offer both privacy and grandeur while maintaining affordability compared to metro counterparts.”

Manit Sethi, Director, Excentia Infra says, “Luxury today is about more than just opulence; it’s about sustainability. Tier II cities offer a clean slate for developers to create green, eco-friendly luxury spaces with biophilic designs, expansive green zones, and energy-efficient architecture. As the demand for luxury rises in non-metro cities, we foresee crafting premium properties that are not just lavish homes but a sustainable and healthier way of life.”

Therefore, the rise of Tier II and III cities as luxury real estate destinations marks a significant shift in India’s property landscape. Fueled by growing wealth, improved infrastructure, and evolving aspirations, these cities are no longer just affordable alternatives to metros but thriving hubs of premium living. As the demand for luxury homes continues to expand beyond metropolitan boundaries, these cities are set to redefine India’s luxury real estate narrative, presenting lucrative opportunities for investors, developers, and affluent buyers.