Tier II Cities Drive Rs 2.44 Lakh Crore Boom In Residential Housing Plots: Report

Tier II cities contributed to 52% of the 4.7 lakh residential plots worth a total of Rs 2.44 lakh crore, created between 2022 and 2025, according to Prop Equity's report on real estate trends. There is an increased preference in Tier II cities for horizontal expansions in real estate, instead of high rises.

"This trend reflects evolving buyer preferences for privacy, customization, and long-term value, amid post-pandemic lifestyle changes an urban fatigue," the report said.

Weighted average prices increased 27% in 2024 to Rs 3,679 per sq ft. The first five months of 2025 saw 45,591 new plots. Tier II cities raced ahead of metros when it came to new plots, fueled by infrastructure upgrades and demand for low-density living.

Sonipat and Rohtak were the cities that spearheaded this uptick in real estate. The report said that these cities courted both prospective home owners and investors due to fewer houses and people as compared to dense metro cities.

Other factors include stronger asset appreciation and more agency in customisation. In Sonipat, integrated township and gated communities are taking the place of isolated plots, these townships are being built by noted developers such as DLF, M3M, Godrej, Omaxe and Prestige, the report stated.

Its strategic infrastructure growth is another factor with projects such as KMP Expressway and Namo Bharat which is courting millenial and Non-Resident Indian buyers.

"This trend isn’t just about constructing homes—it's about empowering families to design personalized living spaces that offer privacy, flexibility, and access to modern amenities backed by strong infrastructure. Leading developers are seeing higher returns on investment, while homebuyers are drawn to the long-term value and affordability these areas offer," Yashank Wason, managing director of Royal Green Realty.

The report estimates a projected land appreciation of 40-60% in the next five years. Panipat, Karnal and Panchkula were some of the other Tier II cities named in the report as seeing an increase in such plots.