South India’s real estate market closed 2025 with an estimated residential property sales value of ₹20,000 crore, marking a decisive recovery from the pandemic phase and signaling a deeper structural shift towards emerging tier 2 and 3 cities, said MR Jaishankar, Chairman and CEO, Brigade Group.
He was speaking at CREDAI SouthCon 2026, a two-day real estate conclave that began in the city on Friday.
According to data shared at the conclave, South India’s tier two and tier three cities could together deliver 40,000 housing units by 2030, rising to 60,000 units by 2035, translating into a compound growth trajectory of 10% to 12% over the period. Developers expect a 100% increase in Tier 2 sales volume over the next five years, subject to macro stability.
According to Mr. Jaishankar, South India still lags behind the pan-India market in absolute terms compared to much larger tier-2 cities in the north and west, including Ahmedabad, Lucknow, Indore and Kanpur. However, he said the second-tier cities in South India, including Coimbatore, Kochi, Trivandrum and fast-growing Visakhapatnam (Vizag), are now emerging as the region’s primary growth engines.
Commercial properties in South India beat 2025 estimates with moderate absorption: two to four million sq ft (office), four to eight million sq ft (retail/mall), 8 to 12 million sq ft (warehouse), 5,000 to 8,000 hotel rooms and 10 to 30 MW of data center capacity.
According to the market forecast, stronger growth is expected by 2030 with an estimated utilization of 8 to 12 million square feet (office), 15 to 20 million square feet (retail), 40 to 60 million square feet (warehouse), 12,000 to 18,000 hotel rooms, and 200 MW to 3
Authorization, e-Khata processes
Bhaskar T. Nagendrappa, President, CREDAI Karnataka, said, “The South Indian real estate sector is entering a decisive decade. With demand-shifting technologies, accelerating Tier 2 cities and stakeholders demanding greater transparency, trust is no longer optional – it is the foundation of growth.”
He said the apex body urged the government to expand unit size limits, reduce GST and stamp duty and make affordable housing viable through faster approvals and PPP land support.
According to industry players, while supply delays are now largely a thing of the past, clearances, e-Khata processes and power connections continue to face bureaucratic hurdles that increase financial costs and slow down handovers.
Acknowledging that Karnataka has not seen a single viable private affordable housing project under the current framework, CREDAI said this reflects the need for a policy overhaul rather than a lack of commitment from developers.
On labour, the apex body said that although the government was better supported and paid, the government, with its use of manpower funds and a growing shortage of skilled workers, was pushing industry towards greater mechanisation.
Published – 23 Jan 2026 23:46 IST
