Tier-2 and Tier-3 Cities Set for 100% Land Price Surge Amid Infrastructure Push: Square Yards

New Delhi, March 11, 2026:  Land prices in India’s emerging Tier-2 and Tier-3 cities are projected to surge between 25% and 100% over the next two to four years. According to a new report by proptech firm Square Yards titled “Realty’s next growth engines: Tier-2, Tier-3 markets in focus,” this appreciation is being fueled by an aggressive government infrastructure push and a decisive shift in economic activity toward smaller urban centers.

The report identifies Bhubaneswar, Cuttack, Erode, Puri, Varanasi, and Visakhapatnam as the primary drivers of the next growth cycle. These markets are expected to see land values react more sharply than stabilized housing segments, particularly where development is supported by new logistics networks, industrial corridors, and employment hubs. In high-growth peripheral areas, multi-year appreciation for plotted developments could exceed 100% as improved connectivity unlocks previously inaccessible land.

Specific infrastructure drivers are already dictating these valuation premiums. Properties within a 1-km radius of metro corridors typically command premiums of 8% to 25%, while larger projects like airports and expressways can trigger gains of up to 70% from announcement to completion. Additionally, industrial corridors and logistics hubs are driving value growth between 20% and 60% by acting as anchors for local employment.

Tanuj Shori, CEO and Co-Founder of Square Yards, noted that India’s real estate market is transitioning into a structurally driven cycle anchored in infrastructure expansion, employment growth, and financial stability. He stated, “As infrastructure and industrial development expand into new regions, residential demand will increasingly follow employment creation. This will unlock new homeownership opportunities while supporting more balanced and sustainable urban growth across emerging cities, with commercial real estate growth reinforcing this broader ecosystem.” Shori added that with Tier-1 cities reaching saturation, unlocking these new territories is essential to maintaining activity in the country’s second-largest employment sector.

The expansion is further supported by a planned public capital expenditure of Rs 12.2 lakh crore and the revival of over 200 legacy industrial clusters. Initiatives such as Semiconductor Mission 2.0 and the expansion of advanced manufacturing are expected to generate large-scale employment, driving sustained residential absorption. This environment is particularly strengthening the mid-income housing segment, specifically in the Rs 50 lakh to Rs 1 crore price bracket, as affordability improves for the salaried class.

Sunita Mishra, Vice-President of Research & Insights at Square Yards, highlighted that measures such as the recently announced Urban Challenge Fund will further unlock the commercial prospects of these cities. She stated, “Along with measures announced in the Budget 2026, planned large-scale investments, such as the recently announced Urban Challenge Fund, would unlock the industrial and commercial prospects of Tier-2 and Tier-3 cities, opening new vistas of growth in the residential segment. For buyers and investors looking for mid-to long-term value appreciation, this is the perfect opportunity.”