Green Real Estate Gains Momentum Beyond Metro Cities in India

Real estate in India is no longer confined to metro cores. Developers and buyers have moved to peripheral and tier-II markets. This raises questions about sustainable housing. As infrastructure development expands ahead of metros, developers and homebuyers in emerging cities are increasingly prioritising green buildings. This helps in providing and promising lower operational costs, healthier environments, which also provide long-term value.

This shift reflects a broader transformation. “Rapid urbanization in India is increasing day by day, leading to interest in sustainable housing, smart infrastructure an environmentally responsible urban planning and along with this green real estate development is gaining the pace and it is no longer limited to metro cities as Tier 2 and 3 cities are increasingly adopting eco-friendly measures due to rising awareness, government incentives, and investor interest,” says Aditya Goel, Co Founder, One Prastha. Tier-II markets like Indore, Jaipur, Lucknow, and Coimbatore are witnessing a strong demand for organised housing projects, which are equipped with sustainable features like solar power systems, rainwater harvesting, and waste management solutions.

One can attribute the biggest drivers of this transition to affordability pressures in the metros. Property prices in the top urban centres have surged significantly over the past few years. This is an opportunity for buyers and developers to explore cities outside of metros. Tier-II cities usually offer comparatively lower land costs while providing a better quality of life. This migration has created new opportunities for sustainable urban expansion.

Government initiatives also back such projects, which in turn help in accelerating growth. In the Union Budget, the Finance Minister announced how Tier-II and Tier-III cities are being seen as the future growth centres. Also, it reveals a budget set aside for planned development in these cities. Investments in highways, metro rail connectivity, industrial corridors and smart city investments make these cities an attractive option for buyers and developers alike. “Although initially the green buildings may increase the project costs by 5 per cent to 15 per cent, they will automatically reduce long-term operational and maintenance expenses through methods like lower energy and water consumption. In Tier 2 and Tier 3 cities, integrating green real estate into mainstream development can help prevent unplanned urban expansion and reduce future environmental stress,” adds Goel.

Developers recognise this move towards sustainability and are making a move towards these peripheral markets. Many firms are now incorporating these green projects as part of their portfolio. These projects are not just conscious of the material incorporated but also climate responsive, energy efficient, with added facilities like rainwater harvesting, waste management systems. All of these help in contributing to a reduced carbon footprint.

However, the challenges persist in this field. Industry reports indicate that housing sales in Tier-II cities have slowed due to price rises and a significant increase in premiumisation. Affordable housing supply has also witnessed pressure in many markets, especially in the metros. Goel advises, “The adoption of renewable energy, climate-responsive architecture, and sustainable construction materials across real estate projects is expected to become a key driver in India’s journey toward achieving Net Zero emissions by 2070, as developers are considering Environmental, Social and Governance (ESG) into the design strategies and upcoming projects. To conclude, collaboration between developers, policymakers, urban planners, and financial institutions will be essential to scale green infrastructure and make sustainable housing more affordable and accessible nationwide.”

FAQ's

Q: What are the expectations for green housing in India, as per the Union Budget 2026?

Real estate industry experts say that green homes can cut down on electricity and energy costs by a huge margin. Additional tax sops by the government in Union Budget 2026 can bring more homebuyers into the fold.

Q: What are the new housing expectations?

India’s real estate sector is entering a new phase of transformation where technology is no longer an optional add-on, but a core driver of growth, efficiency, and investor confidence.