Tier-II cities see heightened developer interest as housing prices rise

Bengaluru: The weighted price of new launch projects in the top 30 tier-II cities rose up to 65per cent between 2023 and October 2024 with 25 cities witnessing a rise in prices and five seeing a decline, according to a report by data analytics firm PropEquity out on Thursday.

Jaipur recorded the highest growth in prices at 65 per cent followed by Guntur at 51 per cent.

Jaipur saw the highest rise in weighted average price of new launch projects at 65 per cent from Rs 4240 per square foot (sf) to Rs 6979 per sf between 2023-October 2024.

Guntur recorded a price rise by 51 per cent to Rs 5169 per sf. Mangalore saw a 41% rise while it was up by 29% for Visakhapatnam.

While Agra, Chandigarh and Bhiwadi saw 59 per cent, 34 per cent and 25 per cent growth in prices respectively, the new launches in these cities were few (between 3-5 projects) during this period.

Meanwhile, Sonepat at 26 per cent witnessed the highest fall in price followed by Mysore (14 per cent), Mohali (8 per cent), Bhopal (5 per cent), and Trivandrum (4 per cent).

Samir Jasuja, Founder and CEO, PropEquity said, “Tier-II cities have seen renewed interest from developers, corporates, financial institutions and the investor community. The cheap availability of land in these cities followed by massive development of connectivity infrastructure and strong demand have led to increased supply of premium and luxury housing from not just incumbent developers but new entrants.”

Goa was the only city where prices crossed Rs 10,000 per sf.

Housing prices in cities of Gujarat remain below Rs 5000 per sf.