Religious tourism driving residential demand in religious cities, Prayagraj witnesses 28% surge

Religious tourism driving residential demand in religious cities, Prayagraj witnesses 28% surge

India is witnessing a significant surge in travel related to religion, which real estate experts say is also driving realty demand in religious tourism hubs. According to Magicbricks data, tier 2 and 3 cities like Prayagraj and Ayodhya in Uttar Pradesh and Puri in Odisha, among others, have seen a jump in enquiries about possible purchases, attributed to a surge in those visiting for religious observances.

Big spiritual events—like the ongoing Mahakumbh Mela, along with other key festivals—that attract millions of visitors are also boosting demand for homestays as an alternative to traditional hotels. This too has pushed up demand for real estate, with data from Magicbricks showing that Prayagraj, for instance, has seen buyer interest in 2024 rising 28 percent from a year earlier.

Similarly, Shirdi saw 67 percent jump in the enquiries, while Puri witnessed 52 percent surge, and Varanasi recorded 18 percent jump in buyer interest.

Also read: After Ayodhya, HoABL to invest in Vrindavan, Varanasi; pump Rs 3,000 cr in 6 projects

Experts said this demand extends beyond self-use, as buyers explore investment opportunities for long-term gains, for instance as holiday homes that, when the family is not using them, convert into managed bed-and-breakfast units to tap into the growing demand for short-term accommodation.

Data showed that though there has been an increase in searches for residential properties in Prayagraj, the supply (listings) has reduced 15.1 percent on-year.

Prasun Kumar, chief marketing officer, Magicbricks said that the growing synergy between religious tourism and real estate is reshaping the residential market in these cities, as buyers recognise the potential for strong rental incomes and lifestyle investments.

“These regions are emerging as hotspots for those seeking unique and affordable opportunities in India’s evolving real estate landscape,” he said.

Property prices

Magicbricks data showed that the average residential price in Prayagraj rose 5.5 percent annually from Rs 6,661 per square foot (psf) in Q4 calendar year 2023 to Rs 7,027 psf in Q4 2024.

In that one-year period, residential prices in Puri appreciated 30 percent to Rs 6,114 psf and in Shirdi, the average price stayed at Rs 4,028 psf, making these markets a compelling value proposition. However, data showed that in Varanasi residential prices fell 5.15 percent due to increasing supply, to reach an average rate of Rs 6,128 psf.

Similarly, after the consecration of the Ram Mandir last year, Ayodhya’s residential prices had experienced a significant spike in the April-June 2024 quarter, rising by 29.36 percent on a quarterly basis, driven by strong investor interest and heightened competition.

However, later on prices tapered slightly and settled at Rs 8,212 psf in October - December 2024 quarter.

Also read: Union Budget's measures may spark real estate boom in top tourist destinations

Local brokers have said that improved infrastructure too has increased demand for residential, commercial and hospitality properties.

Anukul Jain, a real estate dealer active in Prayagraj and Varanasi said that cities that offer religious tourism are turning into realty hotspots as besides end users, a number of big developers are also turning towards these cities to tap into the potential.

“After Ayodhya, Mumbai-based HoABL (House of Abhinandan Lodha) has acquired huge land parcels in Varanasi a few months back to launch its plotted development project here. This shows that tourism is driving a realty boom in these hubs,” he said.

HoABL has acquired around 75 acres in Varanasi, 60 acres in Vrindavan and 45 acres in Amritsar for plotted development projects.

Apart from HoABL, there are the Leela and Taj groups, which have entered the Ayodhya real estate market to develop five-star hotels there.