India’s Emerging City Real Estate Enters New Phase

India’s housing market is widening beyond its largest metropolitan centres, with 11 emerging markets recording a 63% rise in residential prices between 2021 and 2026. The shift is significant because it links property growth to a broader redistribution of jobs, consumption and infrastructure, while raising questions about whether smaller cities can expand without adding pressure on land, water, transport and other urban systems.

The cities identified by the CII and Knight Frank report are Bhopal, Bhubaneswar, Chandigarh Tricity, Goa, Indore, Jaipur, Kochi, Lucknow, Nagpur, Visakhapatnam and Coimbatore. Together, they recorded an average residential price compound annual growth rate of 8% between 2016 and 2026, compared with 4% across the eight largest markets Mumbai, Bengaluru, Delhi-NCR, Hyderabad, Chennai, Pune, Ahmedabad and Kolkata. The figures point to a changing geography of housing demand. Average residential prices across the 11 markets range from about ₹4,500 to ₹13,500 per sq ft, showing that the emerging-city segment is far from uniform. Goa sits at the upper end, while Nagpur and Visakhapatnam remain among the lower-priced markets.

But stronger property appreciation does not automatically mean stronger urban development. The report highlights employment, enterprise formation, population growth and consumption as important factors behind durable real estate demand. Infrastructure can improve access, but cities also need reliable utilities, serviced land, efficient approvals and sufficient formal housing to support long-term expansion. The wider commercial economy is already showing signs of this shift. Tier-2 markets recorded 11.2 million sq ft of warehousing leasing in 2025, broadly similar to 11.4 million sq ft in 2024. Lucknow, Jaipur, Nagpur, Indore, Coimbatore and Bhubaneswar together accounted for 5.3 million sq ft. Retail is expanding alongside logistics. India had 134 million sq ft of organised shopping-centre stock across 32 cities in 2025, including 36 million sq ft in 24 Tier-2 cities. Ten of the identified emerging markets accounted for around 60% of that Tier-2 stock.

Population trends could further broaden the demand base. Cities outside the top eight metros are projected to record population growth of 28.2%, compared with 8.7% in the largest markets. The report estimates that Tier-2 and Tier-3 cities could contribute 25–30% of India’s projected $5.8 trillion real estate output by 2047. For emerging city real estate, the next challenge will therefore be less about adding projects and more about building complete urban systems. Housing growth that is supported by public transport, water security, climate resilience, employment and accessible public infrastructure will determine whether rising property demand translates into durable city growth.

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India’s Emerging City Real Estate Enters New Phase