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YUGEN REALTY, SURAT
The Rise of Tier 2 and 3 Cities
The report highlights a significant shift in India’s real estate investment trends. In 2024, 44% of the 3,294 acres of land acquired by developers was concentrated in Tier 2 and 3 cities, reflecting the growing confidence in their economic and infrastructural potential.
Housing sales in 60 major cities totalled 6,81,138 units in 2024, marking an impressive 23% year-on-year growth. The total sales value surged to ₹7.5 trillion, a remarkable 43% YoY increase, underscoring the robustness of the sector.
Luxury and ultra-luxury housing played a pivotal role in this surge. Properties priced between ₹1–2 crore saw a 52% rise in sales, with 1,32,532 apartments sold, while the ultra-luxury segment (₹2 crore+) experienced an even higher growth of 73%.
The cumulative impact of this demand propelled the real estate sector’s valuation to ₹22.5 trillion, contributing 7.2% to India’s GDP.
Beyond luxury, the affordable housing segment remains a crucial component of growth. The Priority Sector Lending (PSL) category (homes priced under ₹30 lakh) and the ₹30-50 lakh bracket continued to attract both first-time buyers and investors.
Cities such as Pune, Indore, and Coimbatore are witnessing accelerated affordable housing development, making homeownership more accessible.
Surat’s Real Estate Momentum
Surat, a city traditionally known for its textile and diamond industries, is emerging as a formidable real estate hub.
According to the report, Surat’s Housing Price Index (HPI) recorded a 2.7% increase in 2024, reflecting steady demand driven by industrial growth, infrastructural advancements, and increasing investor interest.
In terms of sales, the ₹40L-₹50L segment witnessed the highest activity, with 3,356 units sold, followed closely by the ₹50L-₹75L bracket at 3,058 units and ₹30L-₹40L segment at 2,674 units.
These figures indicate strong demand for mid-range housing, fuelled by a growing workforce and business community.
However, unsold inventory remains a challenge. The ₹50L-₹75L segment leads with 6,152 unsold units, followed by the ₹40L-₹50L category at 5,394 units, highlighting a potential oversupply in mid-tier housing.
Yet, with ongoing infrastructure projects such as the Surat Diamond Bourse and Metro Rail, the city’s real estate market is poised for sustained growth.
Sanjay Mangukiya, Chairman of CREDAI Surat, remarked, “Surat’s real estate market is experiencing steady growth, backed by robust industrial expansion and improved infrastructure. The city’s housing demand is diversifying, with strong interest in mid-range and premium segments. With upcoming developments like the Metro Rail and Surat Diamond Bourse, we anticipate a sustained upward trajectory in both residential and commercial real estate.
Developers’ Outlook on Emerging Markets
Manoj Gaur, chairman of CREDAI, emphasized, “Tier 2 and 3 cities are the bedrock of India’s next phase of urbanization. The fact that they now account for nearly half of all land acquisitions speaks volumes about their potential. As these cities strengthen their connectivity and economic ecosystems, we anticipate a multiplier effect on real estate demand.”
CREDAI President Boman Irani echoed this sentiment, stating, “The paradigm shift towards emerging cities is driven by affordability, infrastructure growth, and decentralization of employment. Developers are recognizing these factors and aligning their strategies to cater to this evolving demand.”
Pankaj Kapoor, Managing Director of Liases Foras, stated, “The real estate market in Tier 2 and 3 cities is undergoing a transformation, with increased affordability and infrastructure development playing a key role. Our data indicates that these cities are witnessing not only higher sales volumes but also a structural shift in buyer preferences. Developers need to align their strategies to tap into this growing demand effectively.”
With Tier 2 and 3 cities witnessing exponential growth in investments, demand, and infrastructure development, India’s housing market is at an inflection point. The insights from the CREDAI-Liases Foras report serve as a valuable roadmap for navigating this evolving landscape, ensuring that India’s real estate sector remains a cornerstone of the nation’s economic progress.
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Disclaimer : This information has been collected through secondary research and Yugen Realty Newspaper is not responsible for any errors in the same.
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