Infrastructure Push May Lift Land Prices in Tier-2, Tier-3 Cities by Up to 100%: Report

Land prices in India's Tier-2 and Tier-3 cities are poised for significant growth over the next few years. This surge is driven by large-scale infrastructure projects and industrial expansion, which are expected to boost demand in these emerging urban centres. 

Infrastructure Projects Driving Land Price Growth 

According to a report by Square Yards, land values in cities such as Bhubaneswar, Cuttack, Erode, Puri, Varanasi, and Visakhapatnam could rise between 25% and 100% within 2 to 4 years. This growth is particularly evident in areas benefiting from new infrastructure corridors and employment hubs. 

Properties located within a 500-m to 1-km radius of metro corridors typically command premiums of 8%-25%, with corridor-level appreciation of 15%-40% after completion. Larger infrastructure projects like airports and expressways can trigger price increases of 30%-70% from announcement to completion. 

Impact of Industrial and Employment Hubs 

Industrial corridors and logistics hubs supported by employment anchors can drive land value growth of 20%-60%. In high-growth peripheral micro-markets, particularly in plotted developments, multi-year appreciation can exceed 80%-100% as connectivity unlocks new development potential. 

Read More: Puravankara Enters Joint Development for ₹1,300 Crore Project on Bengaluru’s Hennur Road! 

Mid-Income Housing Demand on the Rise 

The report highlights that India's residential real estate sector is entering a structurally supported expansion phase. This is backed by ₹12.2 lakh crore investment in planned public capital expenditure, employment growth, and improved financial stability.  

The mid-income housing segment, particularly homes priced between ₹50 lakh and ₹1 crore, is likely to benefit from this growth cycle. 

Conclusion 

In conclusion, the anticipated rise in land prices in Tier-2 and Tier-3 cities is closely tied to infrastructure and industrial developments. These changes are expected to create new opportunities for residential and commercial real estate, driven by employment growth and improved connectivity. 

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