CREDAI’s 6th New India Summit: Emerging Cities Driving Growth

CREDAI’s 6th edition of the New India Summit emphasizes the transformative role of Tier 2 and Tier 3 cities in India’s real estate sector. Under the banner of “Viksit Bharat Unlocking Potential of Emerging Cities,” the conference brought together leading policymakers, industry players, and stakeholders to share ideas on the future of urban growth. Among the notable participants was Smriti Irani, a former cabinet minister and a young global leader at the World Economic Forum whose presence underscored the increasingly pronounced tilt on the side of regional urban development.

An in-depth study released in collaboration with Liases Foras, a premier real estate research agency, ‘Overview of Residential Real Estate Market in 60 Major Cities of India,’ was one of the major highlights of the summit. The report offers valuable insights into a changing housing market and the growing importance of smaller cities.

Tier Two And Three Cities Lead The Way

According to the report, 2023 saw 44% of the 3,294 acres of land purchased by developers occur in Tier 2 and 3 cities a telling sign that investment is shifting significantly. Total housing sales across 60 cities stood at 6,81,138 units, registering an annual growth of 23 percent. Backed by demand for luxurious and ultra-luxurious homes, primary builder sales witnessed a surge, with the total market value reaching ₹7.5 trillion, a handsome 43% YoY growth.

Luxury housing represented 71% of the value of total sales and properties worth ₹1-2 crore experienced a 52% increase, with 1,32,532 apartments selling at this price point. Sales of the ultra-luxury segment (₹2 crore and above) jumped by an even sharper 73%, suggesting strong traction with high-net-worth buyers.

The Indian real estate industry now has a value of ₹22.5 trillion and contributes 7.2% to the country’s GDP. While metro cities are keeping the momentum going with premium housing, emerging cities are providing a good combination of affordability and high-value transactions, which is truly transforming the Indian real estate landscape.

Spotlight: The Road Ahead for Smaller Cities

Several Tier 2 and 3 cities are emerging as logistics, academic and industrial hubs, also boosting the demand for housing. Apart from this, Lucknow, Jaipur and Bhubaneswar have recorded a steady price push, while the highest amount of affordable housing units have been launched in Ahmedabad, Pune, Indore and Coimbatore.

“Urbanisation is like a chariot being pulled forward in wheel ruts. These cities are the bedrock for the next phase of urbanization in India,” said CREDAI Chairman Manoj Gaur. With almost half of all land grabs being initiated in new hotspots, we see a serious shift looming.” He pointed to Nashik’s transformation from a religious pilgrimage destination to a successful urban center as a textbook case of this change.

Boman Irani, president of CREDAI, said, “The nature of real estate in India is changing very fast. Developers are re-evaluating their investment psyches owing to increased demand from mid-segment and affordable housing in smaller cities.”

These emerging cities are set to play an important role in India’s overall economic growth as infrastructure improves and industries start to move towards decentralisation. The New India Summit reiterated CREDAI’s resolve to nurture an equitable, sustainable real estate ecosystem and place smaller cities at the core of India’s development story.