CNN Central News & Network-ITDC India Epress/ITDC News Bhopal: India’s real estate growth story is undergoing an important geographical shift. Residential property prices across 11 emerging markets, including Bhopal, Indore and Jaipur, rose by an average 63 per cent between 2021 and 2026, significantly ahead of the 42 per cent increase recorded across the country’s eight major metropolitan markets. The figures from the CII-Knight Frank report, India’s Next Real Estate Markets, point to a changing pattern of urban growth in which Tier-2 and emerging cities are becoming increasingly important centres of economic and residential activity.
The 11 markets identified in the report are Bhopal, Bhubaneswar, Chandigarh Tricity, Goa, Indore, Jaipur, Kochi, Lucknow, Nagpur, Visakhapatnam and Coimbatore. Together, they recorded an average residential price CAGR of 8 per cent between 2016 and 2026, compared with 4 per cent across Mumbai, Bengaluru, Delhi-NCR, Hyderabad, Chennai, Pune, Ahmedabad and Kolkata. The recent five-year trend makes the shift even more visible.
This trend reflects more than a property boom. Improving infrastructure, better connectivity, expanding consumption and stronger economic activity are creating new reasons for people and businesses to look beyond traditional metropolitan centres. The growth of services, MSMEs, logistics, education, healthcare and new employment opportunities is gradually changing the economic profile of these cities.
The expansion of real estate is also being supported by developments beyond the housing sector. Key Tier-2 markets recorded about 11.2 million square feet of warehousing leasing in 2025. Six of the identified markets—Lucknow, Jaipur, Nagpur, Indore, Coimbatore and Bhubaneswar—accounted for nearly half of transactions across key Tier-2 cities. Retail infrastructure is expanding as well, indicating that the property cycle is increasingly connected with broader economic activity.
For India, this decentralisation of growth can be a positive development. Excessive concentration of jobs and investment in a handful of metropolitan cities has contributed to high housing costs, congestion, long commutes and pressure on urban infrastructure. Stronger Tier-2 cities can distribute economic activity more widely, create employment closer to residential areas and reduce some of the demographic pressure on major metros.
However, the rapid rise in property prices also raises a serious question: who can still afford these homes?
A 63 per cent increase in residential prices over five years is encouraging for existing homeowners and property developers, but it can create a growing affordability challenge for first-time buyers. The fact that a city is becoming economically attractive does not automatically mean that its housing market should become inaccessible to the workforce that drives that growth.
The quoted residential price ranges underline this concern. According to Knight Frank data cited in the report, prices range from around ₹5,000–7,000 per square foot in Bhopal and ₹5,500–7,500 in Indore to ₹7,000–9,000 in Jaipur and Kochi, while Goa has a much higher quoted range of ₹11,500–13,500 per square foot. These are indicative quoted ranges and actual prices vary by location, project and property type.
This is where urban planning must move ahead of the property cycle. Cities cannot be judged only by the number of residential projects announced or the appreciation in property prices. The real measure of successful urbanisation is whether employment, housing, transport, water supply, sanitation, healthcare, education and public spaces grow together.
The next challenge for policymakers is therefore to connect infrastructure development with economic activity. Roads and expressways can improve connectivity, but sustained real estate growth requires businesses, jobs, enterprise, population growth and consumption. Knight Frank has similarly emphasised that the long-term potential of these emerging markets will depend on their ability to convert connectivity into sustained economic activity.
The post-pandemic transformation in housing preferences is another factor worth noting. Hybrid work and improved digital connectivity have given some households greater flexibility in choosing where to live. Buyers in Tier-2 cities are increasingly showing interest in integrated, amenity-led residential communities rather than only conventional standalone housing.
This creates an opportunity for developers, but it also demands greater responsibility. New housing projects must be supported by adequate roads, drainage, water, electricity, public transport and social infrastructure. Building large residential clusters without matching civic capacity can simply transfer the problem from expensive metros to emerging cities.
Affordable housing must remain central to this transition. If property prices rise much faster than household incomes, young professionals, lower- and middle-income families and essential workers may increasingly be pushed toward distant suburbs. That can result in longer commutes, higher transport costs and a fragmented urban structure.
The expansion of Tier-2 cities should therefore not become a race to replicate the most expensive features of metropolitan development. Instead, it should be an opportunity to build cities differently—more compact where appropriate, better connected by public transport, supported by local employment and designed around the needs of residents.
There is also a broader economic opportunity. Real estate has strong linkages with construction, cement, steel, electrical equipment, furniture, logistics, financial services and local employment. A sustained housing cycle can therefore generate economic activity well beyond the property sector. But this multiplier effect is strongest when demand is supported by genuine income and employment growth rather than speculative expectations.
For investors, the message is equally important. Faster price appreciation does not automatically mean that every emerging city or every property project represents a sound investment. Market selection, employment prospects, infrastructure quality, supply conditions, rental demand and local economic fundamentals must be examined carefully. The report itself points toward greater selectivity rather than treating all emerging markets as identical.
For homebuyers, the decision should be driven primarily by affordability and long-term utility rather than expectations of quick appreciation. A house is first a place to live and only then an investment asset. Excessive borrowing based on the assumption that property prices will continue rising rapidly can create financial stress if income growth does not keep pace.
India’s emerging cities now have a significant opportunity to shape the next phase of urbanisation. The 63 per cent rise in housing prices is evidence of growing demand and economic confidence, but it should also serve as a reminder that growth must remain inclusive.
The real success of Bhopal, Indore, Jaipur and other emerging markets will not be measured simply by how expensive their homes become. It will be measured by whether they can create jobs, attract investment, provide quality infrastructure and still remain liveable and affordable for ordinary citizens.
India does not need more expensive cities merely for the sake of property appreciation. It needs stronger cities where economic growth and housing affordability move together. The next real estate cycle can become an engine of balanced development—but only if policymakers, developers and investors remember that behind every property transaction is a family seeking a secure, accessible and sustainable place to live.
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