Big cities = higher returns? A new report on real estate appreciation might just change your investment decision

Tier-II cities like Lucknow and Kanpur others have outpaced metropolitan hubs in real estate value appreciation, according to a report by MagicBricks.

The report revealed that average capital appreciation in Tier-II cities rose by 17.6%, surpassing Delhi’s 15.7%. This trend signals a rising preference among investors and homebuyers for mid-tier cities, driven by their potential for higher returns, according the report.

This trend is most evident in North India, with Kanpur and Lucknow leading at 24.53% and 22.61% year-on-year capital appreciation, respectively, reported NDTV Profit citing the report.


Other cities in the region reflecting a similar trend include Dehradun, Jaipur, and Patna. According to the report, this surge in property values is driven by a combination of strong demand and relatively affordable rates.

For context, the average price per square foot stands at Rs 6,394 in Lucknow, Rs 6,986 in Kanpur, Rs 5,653 in Dehradun, and Rs 5,654 in Jaipur — significantly lower than Delhi’s Rs 18,618 per sq ft, as per Magicbricks data.

Value of homes rise in tier 2 cities
Value of homes sold in India’s top 15 tier 2 cities has increased by 6% to Rs 40,443 crore in Q1 2025 as against Rs 38,102 crore in the same period last year. According to NSE-listed real estate data analytics firm PropEquity, Lucknow with 25% increase in number of units sold in Q1 2025 at 1301 units registered the highest growth amongst top 15 tier 2 cities. This was followed by Coimbatore 21%, Gandhi Nagar 18% and Mohali 2%.

Overall, the sale fell by 8% to 43,781 units in Q1 2025 as compared to 47,378 units in the same period last year. Other 11 cities saw decline in number of units sold in Q1 2025 with Visakhapatnam registering the highest decline (37%) and Ahmedabad and Goa recording the least decline (1% each).