South India’s real estate market closed 2025 with an estimated ₹20,000 crore in residential sales value, marking a decisive recovery from the pandemic phase and signalling a deeper structural shift toward emerging tier-2 and tier-3 cities, said M.R. Jaishankar, chairman and managing director, Brigade Group.
He was speaking at CREDAI SouthCon 2026, a two-day realty conclave commenced in the city on Friday.
According to data shared at the conclave, by 2030 tier-2 and tier-3 South Indian cities could collectively deliver 40,000 residential units, scaling up to 60,000 units by 2035, translating into a compounded growth trajectory of 10% to 12% over the period. Developers expect 100% growth in tier-2 sales volumes over the next five years, contingent on macro stability.
According to Mr. Jaishankar, South India still trails the all-India market in absolute scale when compared to much larger tier-2 cities in the North and West, including Ahmedabad, Lucknow, Indore and Kanpur. However, he said, South India’s tier-2 cities, including Coimbatore, Kochi, Trivandrum and the rapidly advancing Visakhapatnam (Vizag), were now emerging as the primary growth engines for the region.
South India’s commercial real estate has surpassed 2025 projections with modest absorption: two to four Million Square Feet (office), four to eight Million Square Feet (retail/mall), 8 to 12 Million Square Feet (warehousing), 5,000 to 8,000 hotel rooms and 10 to 30 MW data centre capacity.
On market forecast he said, a stronger growth was expected by 2030 with an estimated uptake of 8 to 12 Million Square Feet (office), 15 to 20 Million Square Feet (retail), 40 to 60 Million Square Feet (warehousing), 12,000 to 18,000 hotel rooms and 200 to 300 MW (data centres).
Permissions, e-Khata processes
Bhaskar T. Nagendrappa, president, CREDAI Karnataka, said, “South India’s real estate sector is entering a decisive decade. With technology transforming demand, tier-2 cities accelerating and stakeholders demanding greater transparency, trust is no longer optional- it is the basis for growth.”
He said the apex body has urged the government to expand unit size limits, reduce GST and stamp duty and make affordable housing viable through faster approvals and PPP-based land support.
According to industry players, although delivery delays are largely a thing of the past now, permissions, e-Khata processes and power connections continue to face bureaucratic bottlenecks that push up finance costs and slow down handovers.
The CREDAI acknowledged that Karnataka has not seen a single viable private affordable housing project under the current framework and said this reflected a need for policy overhaul rather than lack of developer commitment.
On labour, the apex body said although better supported and paid, the government under utilised labour-cess funds and a growing scarcity of skilled workers was pushing the industry toward greater mechanisation.
Published – January 23, 2026 11:46 pm IST
