Business EconomyPosted at: Mar 12 2026 1:01PM

New Delhi, March 12 (UNI) Land prices in India’s Tier-2 and Tier-3 cities are likely to rise sharply over the next few years as large-scale infrastructure projects and industrial expansion fuel demand in emerging urban centres, according to a report by proptech firm Square Yards.
The report, titled “Realty’s Next Growth Engines: Tier-2, Tier-3 Markets in Focus,” estimates that land values in several emerging cities could increase by 25% to 100% over the next two to four years, particularly in areas benefiting from new infrastructure corridors and employment hubs.
Cities such as Bhubaneswar, Cuttack, Erode, Puri, Varanasi, and Visakhapatnam are expected to lead the next phase of real estate growth as government-led infrastructure investments expand economic activity beyond major metropolitan centres.
According to the report, land markets tend to react more sharply than stabilised housing segments, especially when supported by employment hubs, logistics networks, and industrial corridors.
Infrastructure development is expected to play a critical role in driving price appreciation. Properties located within 500 metres to 1 kilometre of metro corridors typically command premiums of 8–25%, with corridor-level appreciation of about 15–40% after completion.
Large infrastructure projects such as airports and expressways could trigger even stronger gains. Land prices in their influence zones may rise 30-70% from project announcement to completion, the report said.
In high-growth peripheral micro-markets, particularly in plotted developments, multi-year price appreciation could exceed 80-100% as improved connectivity unlocks new development potential.
Industrial corridors and logistics hubs backed by employment anchors are also expected to drive land value growth of 20–60%, reflecting stronger demand for residential and commercial development.
The report noted that India’s residential real estate sector is entering a structurally supported expansion phase, backed by about Rs 12.2 lakh crore in planned public capital expenditure, rising employment and improved financial stability.
According to Square Yards, this marks a shift away from speculative, liquidity-driven property cycles toward employment-led housing demand, where homebuying activity is increasingly driven by end users rather than investors.
This trend is expected to particularly benefit the mid-income housing segment, especially homes priced between Rs 50 lakh and Rs 1 crore, as affordability improves and income stability rises.
The report also highlighted that the revival of more than 200 legacy industrial clusters, along with initiatives such as Semiconductor Mission 2.0 and expansion in electronics, chemicals and advanced manufacturing, is expected to generate large-scale employment across multiple regions.
This employment growth is likely to drive sustained residential demand in emerging cities while also supporting commercial real estate segments such as office spaces, logistics hubs and warehousing, as businesses expand operations to support economic growth.
Improving macroeconomic stability and a moderation in the repo rate are also enhancing mortgage affordability, making homeownership increasingly accessible to India’s growing salaried class, the report said.UNI VK AAB

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