Tier-2 Cities Beat the Big Eight: Home Prices Up 63% in Five Years
Home prices in 11 of India's emerging cities rose 63% between 2021 and 2026, against 42% across the eight biggest housing markets, according to "India's Next Real Estate Markets", a study by the Confederation of Indian Industry (CII) and Knight Frank India released on 18 September. The 11 are Bhopal, Bhubaneswar, Chandigarh Tricity, Goa, Indore, Jaipur, Kochi, Lucknow, Nagpur, Visakhapatnam and Coimbatore. Over ten years the gap is wider still: an average of 8% a year compounded since 2016, against 4% in the big eight.
The finding was back in circulation on 26 September in industry commentary on tier-2 growth. For you as a buyer, the short version is this: the growth is real, but part of it is a low starting point, and a smaller city's market is harder to sell out of than its price chart suggests.
Key takeaways
- Prices in 11 emerging markets rose 63% from 2021 to 2026; the top eight cities rose 42%.
- Over 2016-2026 the 11 cities averaged about 8% a year compounded, double the 4% of the top eight.
- Quoted average prices run from Rs 4,500-6,500 per sq ft in Nagpur and Visakhapatnam to Rs 11,500-13,500 in Goa.
- Six of the cities took 5.3 million sq ft of warehousing leases in 2025, close to half of the leasing across key tier-2 markets.
- The ten-year numbers imply the big eight were close to flat between 2016 and 2021, so the recent gap partly reflects different starting points.
The study at a glance
| Item | Detail |
|---|---|
| Report | India's Next Real Estate Markets, by CII and Knight Frank India |
| Released | 18 September 2026 |
| Cities covered | Bhopal, Bhubaneswar, Chandigarh Tricity, Goa, Indore, Jaipur, Kochi, Lucknow, Nagpur, Visakhapatnam, Coimbatore |
| Price growth, 2021-2026 | 63% (11 cities) vs 42% (top eight) |
| Average yearly growth, 2016-2026 | 8% (11 cities) vs 4% (top eight) |
| Quoted average prices | Rs 4,500 to Rs 13,500 per sq ft |
| Warehousing | 5.3 million sq ft leased in 2025 across Lucknow, Jaipur, Nagpur, Indore, Coimbatore and Bhubaneswar |
| Comparison set | Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Pune, Ahmedabad, Kolkata |
What each city costs
The reporting we could verify publishes price bands, not city-by-city growth rates. Here is what was released.
| City | Quoted average price (per sq ft) |
|---|---|
| Goa | Rs 11,500-13,500 |
| Chandigarh Tricity | Rs 7,500-10,500 |
| Jaipur | Rs 7,000-9,000 |
| Kochi | Rs 7,000-9,000 |
| Lucknow | Rs 6,500-8,500 |
| Coimbatore | Rs 6,000-8,000 |
| Bhopal, Indore | Within a broad Rs 5,000-9,000 band; exact bands not confirmed |
| Nagpur | Rs 4,500-6,500 |
| Visakhapatnam | Rs 4,500-6,500 |
| Bhubaneswar | Not confirmed |
Goa sits apart because it is largely a second-home and holiday-rental market; buyers there are pricing a lifestyle as much as a job market. If that is your interest, our Goa property page lists current options.
Background: why these 11
CII and Knight Frank did not pick cities on price alone. They used a scoring framework across economic and infrastructure measures to find markets that could lead the next phase of growth. The report credits the price momentum to stronger local economies backed by infrastructure spending, connectivity and rising consumption.
Shishir Baijal, Knight Frank India's chairman and managing director, framed it as growth spreading beyond the traditional metros. He was also careful: in his view a smaller city's prospects depend on whether it can turn new roads and airports into lasting activity, meaning jobs, businesses, population growth, spending and the urban capacity to absorb it all. That caveat is the most useful line in the whole report.
What's driving the rise
Roads, airports and warehouses
New expressways and airports cut the travel time that used to keep companies out of smaller cities. Warehousing is the clearest early signal, because logistics firms move before offices do: the six cities named above leased 5.3 million sq ft in 2025. Where warehouses and industrial parks land, jobs and housing demand follow a few years later.
Global capability centres
Multinational back offices and tech centres have started looking past Bengaluru and Hyderabad. ANSR's 2026 report on emerging GCC locations counted more than 220 centres already running in such cities, growing at close to 11% a year, and assessed Jaipur, Kochi, Coimbatore and Indore among them. These are salaried, stable jobs, which is exactly the tenant and buyer base a housing market needs.
Hybrid work and the price gap
Hybrid work let many professionals keep a metro salary while living closer to family. At the same time, metro homes moved out of reach for the middle class: homes above Rs 1 crore made up more than half of sales in the big cities in the first half of 2026. Our piece on disappearing budget homes explains that squeeze.
Why it matters now
The big markets have slowed. Knight Frank counted 1.71 lakh homes sold across the top eight in January-June 2026, up just 0.7%. PropEquity's data for July-September shows sales across nine large markets down about 6% year on year, detailed in our report on the September-quarter fall in sales. When the metros stall and smaller cities keep rising, developers and investors follow the momentum, which is why this study has been quoted so widely.
The honest view
The headline is accurate. It is also easy to read too much into it.
- Base effects. Run the report's own numbers backwards. 8% a year for ten years is about 116% in total; if 63% of that came after 2021, the 11 cities grew only around 6% a year between 2016 and 2021. For the top eight, 4% a year over ten years is about 48% in total, which leaves under 1% a year for 2016-2021. The metros came into 2021 after five flat years; smaller cities started lower still. These are our approximations from averages, not figures in the report.
- Percentages versus rupees. A Rs 50 lakh flat that gains 63% adds Rs 31.5 lakh. A Rs 1.5 crore metro flat that gains 42% adds Rs 63 lakh. Faster growth on a smaller base does not always mean more wealth.
- Thinner resale markets. The price bands are quoted averages, mostly from new launches. Fewer buyers and fewer brokers mean resale flats can take months longer to sell, often below the launch price of the tower next door.
- Rental yields. The study does not publish yields. Portal and broker estimates for cities like Indore and Jaipur are often quoted a little above metro yields, but no published series settles it, they vary a lot by locality, and they should be checked against actual rents before you count on them.
- Developer quality. Smaller cities have fewer large, listed developers. Check the state RERA registration, the builder's completed projects and any complaints before you pay a booking amount.
Who this is for
End-users already in these cities have the best case. You get a home where you work, at a price a metro can't match, and resale liquidity matters less if you plan to stay.
Investors should think five to seven years, not a quick flip, and buy near jobs: IT parks, GCC clusters, industrial corridors. Our list of the best cities for property investment compares these markets with the metros.
NRIs weighing a tier-2 flat against Dubai should compare rents, taxes and exit options side by side; our Dubai vs India property investment guide does that.
Frequently asked questions
Which 11 cities are in the CII-Knight Frank study?
Bhopal, Bhubaneswar, Chandigarh Tricity, Goa, Indore, Jaipur, Kochi, Lucknow, Nagpur, Visakhapatnam and Coimbatore. The study, called India's Next Real Estate Markets, was released on 18 September 2026.
How much have tier-2 property prices risen?
By 63% on average across the 11 cities between 2021 and 2026, against 42% in the top eight markets. Over 2016-2026 the 11 cities averaged about 8% a year compounded, against 4% for the top eight.
Which of the 11 cities is the most expensive?
Goa, at a quoted Rs 11,500-13,500 per sq ft, because it is largely a second-home market. Nagpur and Visakhapatnam are the cheapest at Rs 4,500-6,500 per sq ft.
Does the report give growth figures for each city?
Not in any coverage we could verify. The public figures are the averages across all 11 cities and each city's current price band, so a single city could have risen much more or much less than 63%.
Is a tier-2 city a better investment than a metro?
It can be, if you hold for five years or more and buy near real employment. Returns in percentage terms have been higher, but resale is slower, the rupee gains are smaller on a lower base, and builder track records vary more, so check the project carefully.
If one of these cities is on your list, Realty Hunting can help you compare the locality, the builder's record and the likely rent before you commit.
