Synopsis – These five underrated South Indian cities are rapidly transforming into premium real estate destinations. This article highlights why these emerging hotspots are attracting investors and NRIs seeking high growth and luxury property opportunities.
The demand for luxury housing in India is now growing beyond Tier-1 cities, aided by SEZs, the expansion of coastal corporations (GCCs), demand for semiconductor and EV manufacturing hubs, continued growth of logistics, and upgrades to infrastructure. This article identifies five smaller and emerging cities in South India with significant appreciation in price, rental yields, and growth potential.
Reasons Why These Cities Are Emerging
- Economic decentralization is beginning to migrate wealth away from saturated metros to emerging urban centers.
- Government action is supporting the growth of new growth corridors in urban centers, special economic zones and updated infrastructure.
- Corporate and manufacturing investments by large companies are generating jobs and increasing demand.
- Improved efficiency and accessibility throughout urban areas is supported by new airport expansions, ports, and industrial corridors.
- Established branded real estate developers have entered new locations with luxury condominiums and so there is increased credibility in site areas.
1. Mangaluru – Karnataka
- Overview & Location Appeal: Coastal city with untouched beaches, education centers and urban amenities that are growing. Highly regarded for its natural beauty and cultural heritage.
- Key Economic Drivers: Special economic zones (SEZ) focused on electronics and petrochemicals, export-import ports, and growing logistics and IT parks.
- Major Developers & Luxury Projects: Prestige and Sobha have recently made entry into the emerging coastal city, offering premium ocean view luxury villas and gated communities.
- Property Price Trends: Leading projects are adopting IGBC (Indian Green Building Council) certifications, with prices in Kadri reaching ₹6,000/sq.ft for premium green-certified apartments.
- Investor Profile & Demand: There is increased interest from non-residential Indians (NRI) and lower levels of demand from affluent local buyers seeking retirement homes or vacation homes near the ocean.
2. Visakhapatnam – Andhra Pradesh
- Overview & Location Appeal: A significant port city that boasts a great climate, tourism opportunities, and superior education. A great coastal area to live in.
- Key Economic Drivers: SEZs for pharma and manufacturing, Visakhapatnam port, IT sector growth, and energy plants and also Google’s $15 billion AI Hub project.
- Major Developers & Luxury Projects: Larsen & Toubro and DSR builders are leading with luxury oceanfront apartments and townships.
- Property Price Trends: Visakhapatnam’s real estate market is poised for sustained growth in the coming years. Factors like the city’s projected status as Andhra Pradesh’s executive capital, ongoing infrastructure upgrades, and increased government investment make the city an attractive investment hub. The demand for both residential and commercial properties is expected to rise, with gated communities and luxury apartments continuing to gain popularity.
- Investor Profile & Demand: Strong local NRI participation; second homeowner and business professionals are primary purchasers.
- Future Outlook: Airport runway expansion, data center hubs and coastal corridor planning bodies well for further value upward change.
3. Coimbatore – Tamil Nadu
- Overview & Location Appeal: Industrial and education center with clean air, lifestyle facilities, and in the process of urbanization.
- Key Economic Drivers: Manufacturing units, textile clusters, soon-to-be-built IT parks, and enhanced logistics.
- Major Developers & Luxury Projects: Prestige, Puravankara developing luxury gated communities and apartments with more features.
- Property Price Trends: Coimbatore’s real estate sector is thriving in 2025 across residential, commercial, and industrial segments. With rental yields averaging Rs. 10,800 per month, Coimbatore stands out as a promising market for long-term investors and rental income seekers.
- Investor Profile & Demand: Primarily residents, HNIs, and corporate executive purchases; added interest from local NRIs.
- Future Outlook: Regional airport enhancements are planned, and metro feasibility studies are under review.
Also read: Affordable Tier 2 & 3 Cities in India That Are Ideal for First-Time Homebuyers in 2025
4. Kochi – Kerala
- Overview & Location Appeal: An upcoming commercial center with a coastal feel, rich culture, and excellent healthcare and education.
- Key Economic Drivers: IT parks in Infopark, port-proximate logistics and shipping, and tourism.
- Major Developers & Luxury Projects: Sobha Limited, Asset Homes developing luxury flats and waterfronts.
- Property Price Trends: Average apartment prices in prime areas ranged between ₹6000 and ₹12,000 per sq ft during this period. Waterfront locations and transit-connected hubs achieved the highest price strength, while developing corridors showed room for incremental value movement.
- Investor Profile & Demand: A healthy presence of NRIs; secondary homes and retiree buyers abound.
- Future Outlook: Modernising airport, smart city initiatives, and metro expansion provide a positive outlook.
5. Thiruvananthapuram – Kerala
- Overview & Location Appeal: The state capital merging tradition with growing industrialisation and IT. Desired for peaceful and safe living.
- Key Economic Drivers: Technopark IT SEZ, defense manufacturing units, and port access.
- Major Developers & Luxury Projects: Asset Homes, Alliance Group doing luxury high-rises and villas.
- Property Price Trends: The city’s housing market is showing steady appreciation and consistent demand. Property values across major zones have grown by nearly 10–12% in 2025, supported by infrastructure expansion, increased employment opportunities, and lifestyle upgradation.
- Investor Profile & Demand: Mix of NRIs, government employees, and businessmen.
- Future Outlook: Continued expansion of the airport and infrastructure upgrades are expected to further increase demand.
Who Should Consider Investing
- Investors wanting long-term capital gains looking beyond the metropolitan hubs.
- Non-Resident Indians want affordable luxury homes with good rental opportunities.
- Property investors wanting a steady income from rental in cities with developing industrial or port potential.
- Buyers looking for a holiday home and/or retirement home centred around lifestyle and location.
Conclusion
Located in growth corridors, these cities offer investors and future homebuyers options of diverse locations outside of metropolitan areas. Investing today in these alternative cities can lead to significant value tomorrow.
Written By Rachna Rajput