Indian Real Estate

Tier 2 Cities in India: Real Estate Review


17, January 2026

Real Estate in Tier 2 cities is booming to the next level!

Tier 2 cities are getting unprecedented attention these days.

Ever since the pandemic wreaked havoc over our lives and the economy, more than the mega and metro cities of India, these comparatively smaller cities and extended townships are transforming into superstars in the nation's real estate sector.

Work From Home is definitely the game-changer in this transition.

Yes, when the whole world understood that working from home was actually a viable alternative in those times of trouble, the migrant population, who made up the biggest chunk of denizens of the metro cities, went back to their native lands.

This caused the economic conditions of these particular cities to be boosted overnight as many of the businessmen understood that the populace who had the pleasure of choosing many high-level grocery, food, and entertainment chains in their metro cities would now be deprived of the same. Thus, using the supply equals demand formula, they came up with instant home deliveries, fast food chains, etc, to give the deprived city folk what they've missed. This, in turn, created many entrepreneurs and also made them popular with the local population as well.

This further boosted other industries, especially the real estate industry as well.

So,

What is a Tier 1 City?

Tier 1 city, in simple terms, is the classification given to the major cities in India according to the population as well as the HRA ranking scheme.

Which are the Tier 1 Cities in India?

There are eight tier 1 cities in India. According to the House Rent Allowance ranking by the government and the population index, the Tier 1 cities in India are:

They are popularly known as the Metro Cities of India.

Ahmedabad and Pune were added to the list in April 2014.

GRC Shreekrish - Homes247.in

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What is Tier 2 City?

Tier 2 cities or Y category cities are the urban spaces that are classified as such under the census of 2001, where a population of 50,000 to 99,999 resides, and the cities are historically and culturally important.

List of Tier 2 cities in India (according to 2011 census)

  • Agra

  • Ajmer

  • Aligarh

  • Amravati

  • Amritsar

  • Asansol

  • Aurangabad

  • Bareilly

  • Belgaum

  • Bhavnagar

  • Bhiwandi

  • Bhopal

  • Bhubaneswar

  • Bikaner

  • Bilaspur

  • Bokaro

  • Steel City

  • Chandigarh

  • Cuttack

  • Dhanbad

  • Bhilai

  • Durgapur

  • Erode

  • Faridabad

  • Firozabad

  • Ghaziabad

  • Gorakhpur

  • Gulbarga

  • Guntur

  • Gwalior

  • Gurugram

  • Guwahati

  • Hamirpur

  • Hubli–Dharwad

  • Jabalpur

  • Jaipur

  • Jalandhar

  • Jalgaon

  • Jammu

  • Jamnagar

  • Jamshedpur

  • Jhansi

  • Jodhpur

  • Kakinada

  • Kannur

  • Kanpur

  • Karnal

  • Kolhapur

  • Kollam

  • Kurnool

  • Ludhiana

  • Madurai

  • Malappuram

  • Mathura

  • Meerut

  • Moradabad

  • Nagpur

  • Nanded

  • Nashik

  • Nellore

  • Noida

  • Patna

  • Puducherry

  • Purulia

  • Prayagraj

  • Raipur

  • Rajkot

  • Rajamahendravaram

  • Ranchi

  • Rourkela

  • Ratlam

  • Salem

  • Sangli

  • Shimla

  • Siliguri

  • Solapur

  • Srinagar

  • Surat

  • Thanjavur

  • Thiruvananthapuram

  • Thrissur

  • Tiruchirappalli

  • Tirunelveli

  • Tiruvannamalai

  • Ujjain

  • Vijayapura

  • Varanasi

  • Vasai-Virar City

  • Vijayawada

  • Vellore

  • Warangal

Real Estate in Tier 2 Cities

This sudden shift has also made many of the IT/ITES companies think about moving their workspaces into the cheaper commercial avenues of Tier 2 cities. With lesser rent and land prices, acquiring lands that are up for grabs is now revolutionizing these smaller cities.

Apart from the metro cities, many of these Tier 2 cities feature in the smart cities initiative by the government of India. These can actually help a lot in improving the employment sector of the cities as well as help them rise in infrastructural capability as well as standards of living.

Already, monolithic roadways such as the Golden Quadrilateral, east-west, and north-south corridors, along with the railways and airway connectivity, are improving the logistics and transportation capabilities.

Once these tier 2 cities improve upon their existing civic and economic superstructures, they can change the very image of India and provide a lot more resources to the ever-growing India Inc.

Tier 2 cities that are nearby to the metrocities can host many manufacturing as well as related industries, which will considerably help in cutting the costs as well as overcrowding troubles we face in Tier 1 cities.

All these will easily heat up the lukewarm realty sector of these cities and boost both the residential and commercial segments as well. Once such a change swoops in, it will create the need for more builders and realtors. This is also a huge opportunity for the current top developers and other players to expand into the lucrative field as well.

Once Tier 1 and Tier 2 cities grow further by evolving with each other, Tier 3 cities and townships can also rope in the development of our country at unprecedented rates. Right now, the increased internet connectivity is doing wonders for these cities, and now we can see the rise of tier 2 cities in India.

Tier 2 cities in India are quickly becoming centers for real estate investment and development. These cities present a tempting prospect for both homeowners and investors, with a number of factors driving their appeal

Affordability

Affordability is a key component of Tier 2 city real estate attraction. Unlike their Tier 1 equivalents, which frequently face sky-high property costs, these cities provide a more accessible housing market. Apartments and single-family homes are often less expensive, making owning a viable option for a larger portion of the population. This affordability aspect has been a major driver of rising demand for residential properties in Tier 2 cities, drawing both end-users and investors.

Improved Infrastructure

Tier 2 cities are undergoing a transformation that includes considerable infrastructure improvements. Government initiatives, in collaboration with the corporate sector, are modernizing transportation networks, increasing connectivity, and upgrading public amenities. These improvements are luring businesses and industries while also improving the general quality of life for inhabitants. Modern roadways, enhanced public transportation, and improved utilities make these cities more desirable places to live and work.

Growing Economy

Tier 2 cities in India are enjoying a rise in economic activity, thanks to government initiatives, industry development, and a vibrant startup ecosystem. This economic growth creates new job opportunities in a variety of industries, drawing a fresh and competent workforce. As a result, demand for housing has surged as professionals seek adequate accommodations to fit their lifestyle and job goals. As a result, the real estate market in Tier 2 cities is expanding rapidly, owing to an influx of working professionals and their housing needs.

Less Congestion

Tier 2 cities provide a welcome relief from the hectic pace of metropolitan life. Lower population densities lessen traffic congestion, resulting in easier commutes and less time spent on travel. Cleaner air quality is another advantage of living in these rising cities, as less traffic adds to a healthier environment. This overall improvement in the urban landscape improves the quality of life for people, making Tier 2 cities more appealing to individuals seeking a better work-life balance.

Better Work-Life Balance

Tier 2 cities provide a welcome relief from the frantic pace of metropolitan life. With lower population densities, traffic congestion is greatly reduced, resulting in smoother commutes and less time spent on travel. Another advantage of living in these rising cities is better air quality, as less motor traffic adds to a healthier environment. This overall enhancement to the urban landscape improves people's quality of life, making Tier 2 cities more appealing to individuals looking for a better work-life balance.

These elements combine to make Tier 2 cities an appealing option for people looking for affordable housing, a higher quality of life, or real estate investment potential.

Also Read: Smart Cities - Present & Future

There you go, folks. These are all you need to know about real estate in Tier 2 cities in India.

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Most Frequently Asked Questions?

Which are the best Tier 2 cities to invest in Apartments and Flats?

According to surveys and general data, the best cities to buy apartments and flats in are Bhubaneshwar, Chandigarh, Lucknow, Noida, Cuttak, Coimbatore, Mangalore, Kozhikode, and Thiruvananthapuram.

Which are the best Tier 2 cities to invest in, Villas or Plots?

The best Tier 2 cities for Villas or Plot investments are Coimbatore, Faridabad, Dehradun, Kanpur, Mysore, Warangal, and Vijayawada.

Which are tier 2 cities in India for property investment?

Nellore, Guntur and Jamshedpur are some of the best tier 2 cities in India for property investment. Prominent tier 2 cities in India are showcasing exceptional growth in terms of residential and commercial real estate, offering all the aspects to make real estate investments.

Which tier 2 cities are growing in India?

Bhubaneswar, Surat, ThiruvananthapuramJaipur, Kochi, Coimbatore, Indore, Lucknow, Nagpur,  and Visakhapatnam are some of the rapidly growing tier 2 cities in India, offering robust connectivity and ever-evolving infrastructure.

Which city has highest ROI in real estate in India?

Some of the most prominent metropolitan cities in India, such as Bangalore, Chennai, Mumbai, Gurgaon, Hyderabad, Pune, Ahmedabad, and Kolkata, are some of the major cities that have higher ROIs in real estate in India.

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