Tier 2 Cities Poised to Become Luxury Silver Zone

Tier 2 cities are matching the growth momentum of metros, and in some cases, outpacing them in urban transformation. What was once considered peripheral is now central to the new luxury real estate map.

As infrastructure, connectivity and disposable incomes rise, so does the appetite for high-end living in cities like Dehradun, Ayodhya, Chandigarh and Sonipat. Luxury here isn’t just imported from the metros—it’s being reimagined locally with smarter planning, curated experiences and a deeper connection to lifestyle and identity. This is the ascent of India’s “Luxury Silver Zone”, where aspiration meets access and smaller cities redefine what premium truly means.

In these cities, luxury living is an authentic expression shaped by local context, heritage and evolving aspirations. Tier 2 cities offer a more grounded, experiential form of luxury, where spiritual capital, natural surroundings and thoughtful design converge. Unlike the often formulaic offerings of metros, tier 2 luxury is personal, place-based and aspirational in a way that speaks to both tradition and transformation.

Per PropEquity, the value of homes sold in the top 15 tier 2 cities has increased by six per cent to INR 40,443 crore in Q1 2025 as against INR 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 flow and lower upfront investment. The combined estimated value of these launches stands at INR 2.44 lakh crore.

The luxury wave in tier 2 cities is a confluence of powerful, place-specific drivers. In spiritual hubs like Ayodhya, the rise of religious tourism is not only boosting infrastructure but also fuelling demand for hospitality-grade residences and culturally resonant townships.

Meanwhile, in naturally endowed regions like Dehradun and Shimla, the focus has shifted to wellness living, second homes, which offer serenity, clean air and premium comfort. Add to this the rapid upgrade in connectivity, including expressways, regional airports and smart transit corridors, and these cities are now firmly on the radar of HNIs, NRIs and investors seeking luxury with long-term value.

Sehaj Chawla, MD, TREVOC Group, says, “In our view, the NCR’s outer belt is evolving into a network of self-sustaining luxury destinations. Cities like Sonipat, Kundli, Panipat and Karnal are stepping into the spotlight fuelled by large-scale infrastructure upgrades. Sonipat is gearing up for a metro link to Delhi and seamless access via the UER-II while Panipat is set for a major leap with the Delhi–Panipat RRTS reducing commute times drastically.”

Importantly, the entry of industrial giants like Maruti Suzuki has added economic weight and aspirational value to the region. Thus, the buyer sentiment is shifting, and these cities are becoming luxury contenders, he adds.

Manit Sethi, Director, Excentia Infra, says, “Homebuyers today don’t just look at property prices; they want a holistic lifestyle. Luxury in tier 2 cities like Dehradun has evolved from colonial nostalgia to modern sophistication.”

Buyers here seek smart homes overlooking the hills with wellness zones, green rooftops and boutique interiors; it’s a huge shift from the earlier second-home mindset to full-time premium living, he adds.

“Hence, as the demand for luxury rises in non-metro cities, we foresee crafting premium properties that are not just lavish homes but a sustainable and healthier way of life.”

Moreover, luxury in tier 2 cities is no longer understated; it’s branded, bold and benchmarked. Developers are bringing in global sensibilities through branded residences, high-spec interiors and lifestyle-driven layouts that rival top-tier metros. Smart townships with integrated clubhouses, wellness zones, concierge services and curated retail experiences are now setting new standards.

Sakshee Katiyal, Chairperson, Home & Soul, says, “Tier 2 and 3 cities are bridging the gap between affordability and luxury. Cities like Ayodhya are seeing cultural and infrastructural transformation. Pilgrimage has evolved the city into a premium tourism destination, and that brings an influx of homebuyers and investors looking for second homes.”

She adds, “We believe the city will continue witnessing a renaissance, and luxury housing becoming an extension of lifestyle and not just a status symbol.”

Piyush Kansal, Executive Director, Royale Estate Group, says, “Tier 2 and 3 cities are witnessing a new era of urban evolution powered by strategic infrastructure and focused investment. With expanded highways, upgraded airports and the rise of business and industrial corridors, these regions are becoming increasingly aspirational.”

Chandigarh has always had a refined sense of urban planning, but now, the definition of luxury is evolving. It’s not just about large bungalows anymore. It’s about curated living: wellness pods, rooftop lounges, sustainable architecture and concierge services.

“We’re seeing growing demand from young entrepreneurs, NRIs and retirees. Hence, as developers, we design with the belief that luxury should be intentional, rooted in local sensibilities yet global in execution.”

Therefore, the rise of luxury real estate in tier 2 cities is no longer a ripple—it’s a strong, sustained wave driven by an aspirational class that knows exactly what it wants. As buyers increasingly seek quality, connectivity and a sense of place, tier 2 cities are proving they’re not the next best option—they’re the next big thing.