Discover the City with the Highest Returns on Real Estate Investments, Beyond Mumbai and Delhi
The Union Budget 2026, unveiled on Sunday, highlights a significant shift in India’s real estate landscape, indicating a move away from traditional metropolitan markets. While cities like Mumbai and Delhi continue to dominate headlines with high-value property transactions, data reveals that the best returns on real estate investments are increasingly found in emerging cities. Notably, Bhubaneswar has emerged as a leader in long-term residential price appreciation, suggesting a broader trend of investor interest shifting towards non-metro areas.
Emerging Cities Outperform Traditional Hubs
Recent analysis from the National Housing Bank’s RESIDEX, covering the period from September 2015 to September 2025, indicates a clear trend favoring non-metro cities for real estate returns. Bhubaneswar topped the list with an impressive 148.3% return on investment, followed closely by Ahmedabad at 147.3% and Gandhinagar at 145.6%. In contrast, traditional metro areas like Bengaluru lagged behind, recording returns below the 100% mark. Gurgaon and Greater Noida also showed strong performance, with returns of 131.2% and 125.2%, respectively.
The data reveals that over a decade, the returns from non-metro cities have consistently outperformed those from major urban centers. Even in shorter time frames, such as five and three years, cities like Gurgaon and Greater Noida maintained their positions as top performers. For instance, Gurgaon achieved a return of 94.1% over five years, while Bhubaneswar recorded a 57.7% return. This trend suggests that investors are increasingly recognizing the potential of emerging markets, which offer more favorable conditions for growth.
Budget 2026: Infrastructure Focus and Mixed Reactions
The real estate sector’s response to the Union Budget 2026 has been mixed. While many developers and analysts welcomed the government’s commitment to infrastructure development, there was disappointment regarding the lack of targeted support for affordable housing. The Confederation of Real Estate Developers’ Associations of India (CREDAI) expressed concerns that the absence of incentives for affordable housing could diminish its market share.
CREDAI National President Shekhar Patel voiced his disappointment, stating that the budget did not address the ongoing challenges faced by the affordable housing sector. Rising construction costs and land prices are making it increasingly difficult for developers to pursue affordable housing projects without adequate policy support. Despite these concerns, CREDAI acknowledged the positive impact of investments in infrastructure, including highways and urban development, which are expected to enhance connectivity and stimulate growth in new areas.
Positive Outlook for Tier-2 and Tier-3 Markets
Despite the mixed reactions, some industry experts remain optimistic about the future of real estate in India. Analysts from Jeffries noted that tax incentives for data centers and relaxed regulations for global capability centers could bolster office demand and real estate investment trusts (REITs). However, they cautioned that rising bond yields might negatively impact sector valuations.
Navin Dhanuka, Director at ArisUnitern, emphasized the importance of the budget’s focus on infrastructure and economic corridors, suggesting that these initiatives could create a beneficial cycle between job creation, housing, and urban expansion. This approach is expected to facilitate housing growth beyond saturated urban centers, allowing for development in well-connected peripheral and Tier-2 markets.
Bhavesh Kothari, Founder and CEO of Property First Realty, echoed this sentiment, highlighting the potential for a committed annual allocation of Rs 5,000 crore for City Economic Regions to reshape development patterns. This investment is anticipated to relieve pressure on metropolitan areas and unlock housing demand in emerging corridors.
Long-Term Benefits for the Real Estate Ecosystem
Aman Sharma, Founder and Managing Director of Aarize Group, praised the Union Budget 2026 for sending a reassuring message to the real estate and infrastructure sectors. He noted that the focused allocation for Tier-2 markets recognizes the potential for significant real estate opportunities in these areas. The introduction of the Infrastructure Risk Guarantee Fund is expected to facilitate long-term capital investment and mitigate risks associated with large-scale projects.
Overall, the budget’s emphasis on infrastructure development is seen as a catalyst for improving connectivity and fostering a positive environment for housing, industry, and employment. This strategic focus aims to restore developer confidence and encourage sustainable growth in India’s real estate market.
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