Is Buying Land in India a Good Investment in 2026?

Residential property prices in 11 emerging Indian markets grew at an annual compound rate of 8% between 2016 and 2026, twice the 4% recorded across the top eight metros. A CII-Knight Frank India report, covered by ANI on September 18, 2026, also found that prices in these emerging markets increased by 63% between 2021 and 2026, against 42% in the metros.

For anyone looking at ROI, there is one thing to keep in mind. These figures show how residential prices have changed across cities, not how much individual plots have appreciated. Since city-wise data on land prices is not consistently available, estimating returns on a specific plot is difficult. The 8% figure gives an idea of the wider market trend, but it does not mean a plot will deliver the same return.

The 11 markets include Bhopal, Bhubaneswar, Chandigarh Tricity, Indore, Jaipur, Kochi, Lucknow, Nagpur, Visakhapatnam, and Coimbatore.

What "ROI on land" actually measures

Land does not offer a fixed return like a bond or fixed deposit. Returns are usually measured in three ways: price appreciation per square foot over time, rental or lease yield, which is uncommon for undeveloped land but more common with developed commercial plots, and a developer's price increases from one phase to the next. The first two reflect actual market activity. The third needs closer scrutiny unless an independent, named source backs it up. A developer's pricing often reflects their own business strategy rather than what buyers are paying in the wider market.

Why tier-2 is beating the metros right now

Three factors are driving this shift. Government capex on infrastructure accounted for 55% of total spend in FY26, up from 39% in FY15, according to the CII-Knight Frank report. At the same time, 852 projects worth roughly ₹17 lakh crore are part of a three-year public-private-partnership pipeline that is still under construction. Much of this work is taking place outside major metros, particularly across roads, rail and industrial corridors. Land prices also play a role. Since tier-2 land starts from a lower base, the same rupee of infrastructure investment can lead to a larger percentage increase than it would in an already-expensive metro suburb.

City by city, the picture thins out fast

Housing.com and PropTiger Research data cited in a Business Standard industry column in July 2026 puts tier-2 micro-markets at 52% of new organized residential plot launches.

Lucknow and Indore are also seeing interest in the premium segment. The article says more than 20% of inventory is testing upscale pricing, but it does not name the source for that figure. It is worth keeping that in mind rather than treating the number as confirmed.

Jaipur and Surat are attracting attention for infrastructure developments, including high-speed rail links. Coimbatore and Nagpur are also seeing continued growth in absorption, although the article does not give a specific CAGR for either city.

There is a clear shift towards tier-2 markets, but the data available for each city varies. If a developer promises a particular ROI for a city, ask them to share the source and calculations behind it. The number alone is not enough to judge an investment.

Tier-1 versus tier-2, stated plainly

With Tier-1 land, a buyer pays more upfront. Since prices are already high, even a sizeable increase in the property's rupee value may translate into a smaller percentage gain. Tier-2 land starts at a lower price, giving it more room to appreciate when infrastructure improves. That said, buying early also means taking a chance on projects that may not progress as expected. A metro line can face delays, and an industrial park may remain on paper or take years to become operational. Either way, the land may see little price growth in the meantime. In Tier-1 markets, buyers are already paying for many of the location's established advantages. This leaves less room for prices to rise further, but there is also less reliance on future development for the investment to make sense.

Managing risk in a tier-2 bet

In tier-2 corridors, infrastructure work can take longer than expected. So, when looking at land, focus on what is already in place. Check road access, utilities, and whether there is actual demand for the area. A proposed metro line, industrial park, or expressway exit could push prices up later, but plans can change and deadlines can slip. It makes more sense to price the land on its current value and treat any future increase as a bonus.

The rules haven't caught up everywhere

RERA registration is compulsory for organized plotted layouts that exceed the threshold set by the state. It also makes details such as the title chain, layout approval, and project timeline available to the public. Always check the registration number on the relevant state RERA portal instead of relying on the sales documents alone. Land conversion rules vary from state to state, and unconverted land carries considerably more legal risk, regardless of the city.

Reading past a sales pitch

If someone makes an ROI claim, ask them where the numbers came from. Do they have a research source to back it up? And does that data cover the whole city or just the micro-market where your plot is located? Statements like "the market's growing fast" or "prices have doubled here" are easy to make. Without a source and a time frame, there's no way to check if they're true. It's marketing, not data.

What a developer's own numbers are really telling you

Ask a sales team about ROI, and you'll often get a chart showing price changes across different phases of their own project. But that only tells you how the developer has priced the project. It doesn't prove that the wider market is seeing the same demand. Developers may increase prices from one phase to the next for several reasons, including clearing inventory, recovering costs, or meeting margin targets. That's not necessarily dishonest, but it doesn't tell you what a buyer could actually get on resale. Confusing the two can leave buyers with unrealistic expectations when it's time to sell.

No income while you wait

An undeveloped plot does not generate income while you hold it. It brings in no rent or yield, so you are relying entirely on future appreciation. This makes raw land different from an income-producing asset and is worth considering when deciding how much of your portfolio to allocate to land versus assets that provide regular income.

Yield is a different question from appreciation

It's worth separating two things people lump together under "ROI": price appreciation and yield, the income an asset throws off while you hold it. Undeveloped residential plots generate zero yield. Every rupee of return comes from eventual sale, whenever that happens. Commercial or agricultural-use land that's actively leased can produce a yield, but that's a fundamentally different asset than a residential plot bought for future appreciation or construction. Mixing the two up, or letting a sales pitch mix them up for you, sets expectations that the specific land you're buying was never built to meet.

What this looks like in HOABL's markets

HOABL runs branded plotted developments in tier-2 growth corridors, including Nagpur, one of the 11 cities in the CII-Knight Frank basket above. Every project ties to a RERA registration and a documented layout approval before it goes on sale, which handles the verification step you'd need to do regardless of developer. It's not a promise of a specific return. The market itself doesn't make that promise either.

FAQs

What is the average ROI on land in tier-2 Indian cities?

Residential prices in an 11-city tier-2 basket rose 63% between 2021 and 2026, and grew at an 8% CAGR from 2016 to 2026, per the CII-Knight Frank India report. These are city-wide averages, not plot-specific ROI, so individual projects will vary from this considerably.

Which tier-2 cities are seeing the strongest land demand right now?

Jaipur, Lucknow, Indore, Coimbatore, and Nagpur are seeing growing interest in land, driven by infrastructure development and a rising share of plot launches, according to the CII-Knight Frank and Housing.com/PropTiger research cited above.

Is tier-2 land riskier than tier-1 land?

Not necessarily. The risks are different. In tier-2 cities, returns depend more on whether planned infrastructure projects are completed on time. In tier-1 cities, much of the growth is already reflected in land prices, leaving less room for unexpected gains or losses.

Should I trust a developer's own ROI figures for their project?

Be cautious. Internal, phase-over-phase pricing reflects a developer's own strategy, not the open market. Weight external, independently named sources far more heavily.

How do I verify a tier-2 land project before I invest?

Check RERA registration on the state portal yourself. Confirm land conversion status. Separate what the land is worth today from whatever future infrastructure hasn't been built yet.