Luxury housing in tier 2 cities: Experts share key trends - Check details
In tier 2 cities, buyers are seeking gated communities that combine safety with lifestyle - wellness -focused amenities like gyms, yoga studios, and swimming pools, alongside modern clubhouses and curated social spaces.
Luxury housing demand is no longer concentrated in India's metros; it is spreading steadily into Tier 2 cities where aspirations are rising alongside infrastructure. These emerging markets are witnessing a new wave of premium residential growth, driven by factors such as better road and airport connectivity, the return of NRIs, and the rise of well-travelled professionals seeking global lifestyles at home.
In tier 2 cities, luxury living takes on a character of its own—deeply influenced by local heritage, cultural identity, and the aspirations of a new generation. Unlike a decade ago, when luxury in these cities meant larger floor areas, today, they reflect a more grounded, experiential form of luxury where natural landscapes, spiritual roots, and thoughtful design intersect. They are more about smart automation, sustainable designs, and curated community living, signalling a shift in both consumer mindset and market dynamics.
Growing investor interest in plots
As per PropEquity, the value of homes sold in India's top 15 tier 2 cities has increased by 6 per cent to Rs 40,443 crore in Q1 2025 as against Rs 38,102 crore in the same period last year. The surge comes amid growing investor interest in plots as a flexible and appreciating asset class, and developers opting for plotted developments to ensure faster cash flows and lower upfront investment. The combined estimated value of these launches stands at Rs 2.44 lakh crore.
Besides, smart home innovations are becoming the core elements of luxury living in tier 2 cities. Buyers in markets like Chandigarh and in NCR peripheries like Sonipat and Dharuhera are no longer satisfied with just spacious layouts—they want homes that anticipate their needs. From voice-enabled assistants that manage daily routines to automated lighting, climate control, and advanced security systems, technology is redefining comfort as effortless control. What makes this shift noteworthy is how quickly it is being embraced outside the metros, signalling that modern homeowners in tier 2 cities view digital convenience not as a luxury add-on, but as an essential part of aspirational living.
According to Sehaj Chawla, Managing Director, TREVOC Group, the NCR’s outer belt is gradually transforming into a cluster of self-sufficient luxury hubs.
"Cities such as Sonipat, Kundli, Panipat, and Karnal are emerging, driven by major infrastructure developments. Sonipat is preparing for a metro connection to Delhi and smooth access via the UER-II, while Panipat is poised for a game-changing boost with the Delhi–Panipat RRTS cutting commute times significantly. The presence of industrial giants like Maruti Suzuki has also added both economic strength and aspirational appeal. All of this is shifting buyer sentiment, positioning these cities as serious contenders in the luxury housing landscape,” Chawla said.
Buyers seeking gated communities
Moreover, in tier 2 cities, buyers are seeking gated communities that combine safety with lifestyle—wellness-focused amenities like gyms, yoga studios, and swimming pools, alongside modern clubhouses and curated social spaces. There’s a growing desire for environments that support both personal well-being and social connection, where families can spend quality time, entertain friends, and feel part of a like-minded community. For these buyers, true luxury is about a holistic living experience that balances comfort, convenience, and lifestyle aspirations.
Umang Jindal, CEO, Homeland Group, feels that sustainability is emerging as the new luxury in real estate.
"Buyer’s today are highly aware of the environmental impact of their choices; they want green-certified projects, eco-sensitive designs, and communities with landscaped open spaces that breathe. It’s a mindset shift where modern living is deeply tied to responsibility. In cities like Chandigarh, we’ve noticed families are willing to invest more for homes that have solar power, rainwater harvesting, and natural ventilation. In many ways, luxury in here now means living in harmony with nature while enjoying the best of urban comforts," Jindal said.
"Tier 2 cities are emerging as some of the most exciting real estate markets today, and infrastructure is the key catalyst here. Improved connectivity, new highways, and well-planned townships are turning peripheral areas into high-potential investment destinations. Both investors and homebuyers are now looking at places like Dharuhera for modern amenities. Such emerging locations are paving the way for value investment in the region,” Dr Vishesh Rawat, VP & Head of Marketing, Sales & CRM, M2K Group, concluded.