Fri Jan 23 18:16:23 UTC 2026: ### South India’s Real Estate Market Experiences Strong Recovery, Tier-2 Cities Driving Growth
The Story: South India’s real estate market demonstrated significant resilience in 2025, closing with an estimated ₹20,000 crore in residential sales value. This marks a substantial recovery from the pandemic’s impact and indicates a structural shift towards tier-2 and tier-3 cities. Speaking at CREDAI SouthCon 2026, M.R. Jaishankar of Brigade Group highlighted the potential of cities like Coimbatore, Kochi, Trivandrum, and Visakhapatnam (Vizag) as primary growth engines for the region.
The sector is anticipating continued expansion, particularly in commercial real estate, with forecasts projecting substantial increases in office space, retail, warehousing, hotel rooms, and data center capacity by 2030. Industry leaders also emphasized the importance of transparency and trust in sustaining this growth, urging the government to address bureaucratic bottlenecks and policy limitations.
Key Points:
- South India’s residential sales reached an estimated ₹20,000 crore in 2025.
- Tier-2 and tier-3 cities are projected to deliver 40,000 residential units by 2030 and 60,000 by 2035, growing at 10-12%.
- Commercial real estate surpassed 2025 projections in various sectors, including office, retail, warehousing, hotels, and data centers.
- CREDAI urged the government to reduce GST and stamp duty and streamline approvals for affordable housing.
- The industry faces challenges including bureaucratic delays in permissions and a scarcity of skilled labor.
Critical Analysis:
The historical context provided includes a mention of India and the EU working out a trade deal. This could be indirectly related to the real estate market in South India as improved international trade and cooperation often spur economic growth, which in turn could fuel demand for residential and commercial real estate. The Nipah virus outbreak could have a dampening effect on investor confidence and migration to tier-2 and tier-3 cities. It is important to closely monitor the success of India’s containment efforts.
Key Takeaways:
- South India’s real estate market is rebounding strongly, driven by tier-2 and tier-3 cities.
- Commercial real estate is experiencing robust growth across multiple sectors.
- Government policy support is crucial for sustaining growth, especially in affordable housing.
- Bureaucratic inefficiencies and labor shortages remain key challenges for the industry.
- Continued macro stability is essential for meeting ambitious growth projections.
Impact Analysis:
The shift towards tier-2 and tier-3 cities has long-term implications for urban planning, infrastructure development, and economic diversification in South India. The projected growth in commercial real estate signifies increasing business activity and job creation in these regions. However, addressing bureaucratic hurdles and skill gaps is critical to ensuring sustainable and inclusive growth. Failure to do so could limit the realization of these projections and widen the disparity between major metropolitan areas and emerging cities. The industry’s emphasis on transparency and trust also suggests a move towards greater accountability, which could attract more investment and improve consumer confidence in the long run.
First Piper 