Infrastructure, Opportunity Fuel Tier 2 Real Estate Boom, Lucknow Leads Charge

New Delhi, June 4, 2025: Rising affordability, infrastructure development and changing lifestyle preferences are making Tier 2 cities the new real estate growth engines. While many cities are witnessing a slump in real estate momentum, Lucknow has emerged as a striking outlier.

According to a PropEquity report, the city defied the overall slowdown with a 48 per cent increase in sales value and a 25 per cent increase in sales of residential units. Rising aspirations, infrastructure-led planning and a proactive private sector that has quickly adjusted to changing consumer preferences have all contributed to this growth.

Alongside Lucknow, western India, including Ahmedabad, Surat and Gandhinagar, contributed 79 per cent of total units sold and 74 per cent of the overall sales value. Meanwhile, state capitals, including Jaipur, Bhubaneswar, Panaji and Bhopal, accounted for 25 per cent of all sales and 30 per cent of the total sales value, showing a 17 per cent increase in revenue.

Besides, the report highlights that the Lucknow’s sales value increased to INR 1,797 crore with 1,301 units sold. This displays the highest growth among tier 2 cities, due to increased demand for organised housing, better infrastructure and expanding job opportunities. The city’s mix of modernisation, heritage and infrastructure growth is driving its realty boom.

High-ticket endeavours like the Purvanchal Expressway, the Outer Ring Road and the growing metro network are some of the strategic infrastructure developments that have immensely improved connectivity within and beyond the city.

Additionally, government projects under AMRUT and the Smart City Mission are transforming the urban environment and making the city a better place to live and strengthening civic infrastructure. Moreover, a continuous flow of people from smaller towns is making their way to the city, hoping to get access to better employment, healthcare and education facilities. Developers are crucial in transforming Lucknow’s skyline and residential texture as infrastructure sets the stage for city rejuvenation.

“Lucknow is no longer just a cultural capital; it’s becoming an investment hotspot. The transformation is driven by smart infrastructure upgrades that ease mobility and unlock real estate corridors,” says Mohit Goel, MD, Omaxe Group.

“Connectivity through major expressways like the Purvanchal, Lucknow-Agra and upcoming Ganga and Kanpur-Lucknow Expressways, along with metro expansion, has brought the city’s real estate to an inflexion point, especially in strategic locations like Outer Ring Road and Raebareli Road.”

In addition to infrastructure-driven momentum, Lucknow’s real estate surge is being propelled by the emergence of high-performing micro-markets that present compelling investment potential.

As per a report by Colliers, areas like Gomti Nagar Extension have witnessed notable appreciation. Over the last 10 years, the average land price for plotted developments has increased by 1.7 times to approximately INR 7,500 per square foot. With a predicted 1.5x increase over the next five years and a 1.9x increase by 2035, this trend is anticipated to continue.

Another notable area is Amar Shaheed Path, where land prices have increased by 2.4 times over the past 10 years to about INR 4,700 per square foot. According to projections, the value will increase by 1.9x by 2030 and 3.0x by 2035.

With land prices averaging INR 3,900 per square foot, a 3.5x increase over the previous ten years, Raebareli Road is also quickly becoming a prime corridor. With a possible 2.0x increase in five years and a 3.4x increase by 2035, the outlook is similarly optimistic. These numbers demonstrate that Lucknow’s growth story extends beyond its iconic sites. The city’s micro-markets are developing into long-term value centres for investors and end users.

Yash Miglani, MD, Migsun Group, says, “Lucknow is no longer just another Tier-2 city; it’s rapidly emerging as a prime real estate hotspot. The scale and speed of infrastructure development here are unmatched, fundamentally changing the investment landscape.”

He adds, “We’re seeing demand spike across all residential segments driven by buyers who refuse to compromise on quality or lifestyle. Hence, it’s clear that Lucknow is setting a new benchmark for organised housing in Tier-2 India.”

Neeraj Sharma, MD, Escon Infra Realtors, says, “We believe that Lucknow is unquestionably at the forefront of the real estate boom. Large-scale infrastructure initiatives like the Ganga Expressway, Purvanchal Expressway and Kanpur-Lucknow Expressway are opening up new growth corridors and revolutionising connectivity.”

Additionally, micromarkets like Shaheed Path and Gomti Nagar Extension “are in high demand as they provide a special combination of affordability and contemporary, future-ready development. Thus, Lucknow isn’t just keeping pace with Tier-2 growth; it’s paving the way for profitable returns”.

Thus, through strategic growth and a changing urban identity, Lucknow has established itself as a leader among Tier 2 cities, changing the real estate market. The city continues to stand out as a desirable location for investors and homebuyers seeking sustainable growth, high living standards, and long-term value.