Tier 2 Cities in India: Real Estate Review

Date: 23-April,2022Last Updated: 26-September,2022
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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 its 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 real estate sector of the nation.

Work From Home is definitely the gamechanger in this transition.

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

And 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 metrocities 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.

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 HRA ranking scheme.

Which are the Tier 1 Cities?

According to the House Rent, Allowance ranking by the government and the population index, the Tier 1 cities in India are Delhi, Bangalore, Chennai, Mumbai, Kolkata, Hyderabad, Pune & Ahmedabad. They are popularly known as Metro Cities of India.

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

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

  • Coimbatore

  • Cuttack

  • Dehradun

  • Dhanbad

  • Bhilai

  • Durgapur

  • Erode

  • Faridabad

  • Firozabad

  • Ghaziabad

  • Gorakhpur

  • Gulbarga

  • Guntur

  • Gwalior

  • Gurugram

  • Guwahati

  • Hamirpur

  • Hubli–Dharwad

  • Indore

  • Jabalpur

  • Jaipur

  • Jalandhar

  • Jalgaon

  • Jammu

  • Jamnagar

  • Jamshedpur

  • Jhansi

  • Jodhpur

  • Kakinada

  • Kannur

  • Kanpur

  • Karnal

  • Kochi

  • Kolhapur

  • Kollam

  • Kozhikode

  • Kurnool

  • Ludhiana

  • Lucknow

  • Madurai

  • Malappuram

  • Mathura

  • Mangalore

  • Meerut

  • Moradabad

  • Mysore

  • 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

  • Vadodara

  • Varanasi

  • Vasai-Virar City

  • Vijayawada

  • Visakhapatnam

  • 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 to acquire lands that are up for grabs are 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 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.

Common FAQ

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

According to surveys and general data, the best cities to in 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.

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