Tier 2 Cities Emerge as Real Estate Growth Engines: Magicbricks

NEW DELHI:
India’s real estate investment landscape is undergoing a notable shift, as Tier 2 cities increasingly outperform their Tier 1 counterparts in capital appreciation, according to the latest analysis by Magicbricks, India’s leading real estate platform. Fueled by infrastructure expansion, increasing affordability, and rising demand, Tier 2 cities are rapidly becoming the new growth hubs, delivering strong returns and capturing investor interest.

The northern region is witnessing a pronounced surge in Tier 2 performance. According to Magicbricks, the average capital appreciation across tier 2 cities stands at 17.6%, outpacing Delhi’s 15.7% by a significant margin. Kanpur takes a lead with a remarkable appreciation of 24.53% YoY followed by Lucknow at 22.61% YoY appreciation, both surpassing the national capital in terms of capital appreciation. While the average price in Delhi is INR 18,618 psf, Lucknow (INR 6394 psf), Kanpur (INR 6986 psf), Dehradun (INR 5653 psf) and Jaipur (INR 5654 psf) emerged as relatively affordable cities with competitive infrastructure to invest in.

Elaborating on the same, Prasun Kumar, Chief Marketing Officer, Magicbricks said, “North India’s real estate landscape is evolving rapidly. These Tier 2 cities are no longer secondary markets—they’re becoming prime investment destinations. With expanding infrastructure, increasing supply of modern housing, and rising demand from young professionals and first-time buyers, these cities are poised to play a major role in India’s real estate growth over the next decade.”

Similarly, tier 2 towns in western India present a compelling investment opportunity, registering 22.3% appreciation—closing in on Mumbai’s 20.3%. Goa, in particular, emerged as a frontrunner, recording an extraordinary 66.37% YoY capital appreciation, with average price touching INR 13290 psf as against INR 28921 psf in Mumbai. This spike positions Goa as one of the most dynamic markets in the region, driven by demand for second homes, rental yields, and tourism-linked investments.

In Eastern India, Tier 2 cities posted an average capital appreciation of 14.63%, and Patna stood out as the region’s high-growth market, clocking a 15.12% appreciation, a signal of the city’s rising stature as an investment-worthy destination.

In the South, Tier 2 cities continue to outperform. Kochi (16.55%) for example, significantly outpaced Chennai’s 11.9% increase in capital appreciation.