Religious tourism driving residential demand in tier-2 markets: Report

New Delhi [India], December 4 : 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 per cent year-on-year (YoY) increase in demand, while Varanasi recorded an 18 per cent surge.
Puri, a popular destination for devotees of Lord Jagannath, posted a 52 per cent growth, and Shirdi, home to the revered Sai Baba shrine, topped the list with a 67 per cent 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 per cent in the past year due to increasing supply, the market remains attractive with an average rate of Rs 6,128 per square foot (psf).
Similarly, Prayagraj saw a dramatic price escalation of 122 per cent between January and March 2024 due to high demand, but rates have since stabilized at Rs 6,645 psf.
In contrast, Puri has experienced a 30 per cent price appreciation over the last year, with rates reaching Rs 6,114 psf. Shirdi offers one of the most compelling value propositions, with an average price of Rs 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.