Demand for housing in Tier II cities, especially villas, is soaring due to surging property prices in the top seven cities, increased economic activity, and robust amenities such as schools and hospitals in Tier 2 cities, according to industry stakeholders.
Luxury villas in Tier II cities range from ₹1 to 2 crore, as per Sotheby International Realty. In Delhi, luxury properties start at ₹7.5 crore; Mumbai’s starting price is ₹75 crore. In Goa, independent villas begin at ₹6 crore, while in Bengaluru, luxury villas range from ₹5 to 50 crore, the company added.
Tier II cities, including Ahmedabad, Surat, Nasik, Jaipur, Mysore, Kochi, Thiruvananthapuram, and Chandigarh , have witnessed significant demand for villas.
Prospective home buyers are attracted not only for residential purposes but also as lucrative investment opportunities in Tier II cities and popular holiday destinations. According to Ashwin Chadha, CEO of India Sotheby’s International Realty, organized growth within the sector is pivotal.
“Developers are drawn to lower land values, enjoying higher profit margins compared to saturated markets. The appeal for villas in Tier II cities is boosted by comparatively lower property rates and the availability of well-located land parcels,” he added.
Moreover, between January and September 2023, around 35 prominent domestic and international retail brands expanded their presence into 14 Tier II cities, showcasing a growing appetite for high-street brands, states real estate consulting firm CBRE South Asia.
Similarly, the rising interest in owning a villa is also driven by lifestyle choices and long-term investments. Saurabh Garg, co-founder and chief business officer of proptech unicorn NoBroker, notes that people are increasingly drawn to personalized and expansive properties, anticipating future appreciation.
In fact, the real estate cycle is expected to maintain upward momentum in the next few years, with villas likely witnessing heightened traction.
“If we take into consideration the current scenario, then yes, villaments will witness heightened traction in the coming year. With the overall growth of the luxury segment, it is likely that villas will become largely popular amongst homebuyers and will push the developers to innovate in space,” said Angad Bedi, MD, BCD Group, which has developed projects in cities such as Raipur, Indore.
This demand is not limited to Tier II cities; a report by NoBroker indicates a 32 per cent jump in demand for villas in Bangalore compared to pre-COVID years, followed by 25 per cent in Delhi NCR, 30 per cent in Mumbai, and 27 per cent in Hyderabad.
The luxury segment is experiencing increased demand for spacious and luxury real estate properties, extending beyond metropolitan areas.
Plotted developments and villas are preferred, indicating a broader trend towards a diversified real estate market. Homebuyers seek residences and strategic investment options in regions beyond major urban centres.