Authored by: Mr. Ravindra Gandhi, Managing Director of Tirasya Estates
The Indian real estate market has witnessed significant transformations in recent years, driven by a confluence of economic, demographic, and socio-cultural factors.
The market is shifting from a strong demand for affordable housing to premium residential properties. This shift, notably seen in the Indian tier 2 and 3 cities, reflects changing consumer preferences, the rise of affluence, and evolving lifestyle aspirations, leading the residential market to witness an upsurge over the years.
A report by PropEquity highlights that the housing sales across the top 30 tier 2 cities have increased 11% annually, driven by high consumer demand, strong economic growth and a growing desire for homeownership. Further, Knight Frank’s research reveals that the trend for homebuying varies, with 37% seeking upgrades, 32% being first-time buyers, and 25% investing in property.
Thus, the property market in these Indian cities is experiencing rapid growth, attracting investors and homebuyers.
Catering to these demands, developers focus more on premium properties, especially in tier 2 and 3 cities, to meet the growing consumer expectations for homes with modern amenities, spacious layouts, and high-end features. India continues to urbanize, and the real estate market in these cities is transforming rapidly.
This transformation is due to population growth, infrastructure development, and economic diversification, which are creating a greater demand for premium residential properties.
Cities like Goa are fast consolidating their reputation as the prime destinations for high-net-worth individuals seeking a harmonious blend of relaxed living and modern luxury. With growing demand for spacious homes, scenic surroundings, and lifestyle-centric properties, the region’s real estate market is evolving to cater to diverse aspirations. Goa offers premium options emphasizing sustainability and sophistication, from eco-friendly holiday villas to exclusive gated communities.
Moreover, the affordability of land and real estate in tier 2 and 3 cities has made them an attractive option for homebuyers and developers. As these cities grow, they are quickly catching up with metropolitan areas like Delhi-NCR in terms of demand for premium residential properties.
Further, as the infrastructure and connectivity advances in tier 2 and 3 cities, the region’s residential sector caters to families looking for larger homes strategically located and equipped with high-quality amenities at competitive prices. As the demand for high-end homes increases, the sector is anticipated to bring more luxury projects in these cities that match modern homebuyers’ desires.
In addition, tier 2 and 3 cities are transforming into business and industrial hubs, encouraging both residential and commercial real estate development. The growth of IT, manufacturing, education, and healthcare sectors in these cities provides new job opportunities and drives the demand for housing. Real estate developers are keen to tap into these markets, as smaller cities offer less competition and higher potential returns on investment.
The development of integrated townships, gated communities, and luxury apartments is increasingly seen in these areas, catering to the changing aspirations of the urbanizing population.
Today’s buyers seek amenities like enhanced security, recreational areas, and sustainable designs. This shift reflects a lifestyle evolution among Indian homeowners who view real estate as a long-term investment in quality of life. Buyers also demand sustainable residential projects with green spaces and energy-efficient systems. Even though affordable housing remains a critical need, an increasing appetite for premium living spaces requires design, amenities, and sustainability innovation.
It will be challenging for developers to remain competitive in such a scenario if they fail to adapt to changing demands. The ability to balance affordability with luxury in a scalable and sustainable manner will define the next growth phase in India’s dynamic real estate landscape.