Tier-2 cities with strong religious tourism appeal, such as Prayagraj, Varanasi, Puri, and Shirdi, are witnessing a sharp rise in residential demand, according to a report by Magicbricks. Driven by a combination of self-use and investment motivations, these cities are emerging as residential hotspots, leveraging their cultural and spiritual significance.
Prayagraj has seen a remarkable 28% year-on-year (YoY) increase in demand, while Varanasi recorded an 18% surge. Puri, a popular destination for devotees of Lord Jagannath, posted a 52% growth, and Shirdi, home to the revered Sai Baba shrine, topped the list with a 67% rise in buyer interest.
The demand extends beyond permanent residence, with buyers eyeing opportunities for long-term gains, holiday homes, and short-term accommodations such as bed-and-breakfasts (BnBs) to cater to the influx of tourists.
While residential prices in Varanasi have reduced by 5.15% in the past year due to increasing supply, the market remains attractive with an average rate of ₹6,128 per square foot (psf). Similarly, Prayagraj saw a dramatic price escalation of 122% between January and March 2024 due to high demand, but rates have since stabilized at ₹6,645 psf. In contrast, Puri has experienced a 30% price appreciation over the last year, with rates reaching ₹6,114 psf. Shirdi offers one of the most compelling value propositions, with an average price of ₹4,028 psf, making it a lucrative option for buyers.
The surge in residential demand in these cities can be attributed to several factors, including the growing popularity of religious tourism, improved infrastructure, and the potential for rental income from holiday homes.
This trend is not isolated. A report by Colliers India identified cities like Ayodhya, Varanasi, Puri, Dwarka, Shirdi, Tirupati, and Amritsar as high-potential areas expected to witness accelerated real estate development, bolstered by government policy support and infrastructure growth in temple towns.
Additionally, a report by CBRE South Asia highlighted that spiritual tourism is driving a retail boom in 14 key cities, including Varanasi, Puri, Shirdi, and Amritsar, with retail brands expanding their presence to cater to the growing tourist population.
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The convergence of religious tourism and real estate development in these tier-2 cities underscores a significant shift in India’s property market, presenting lucrative opportunities for investors and homebuyers alike.
