Home sales decline in Tier-2 cities

Home sales in the country’s top 15 Tier-2 cities declined by 8% in the first quarter of this year, dropping to 43,781 units. However, the total sales value increased by 6% to reach Rs 40,443 crore. These figures were revealed by real estate data analytics firm PropEquity.

Compared to the same period last year, when 47,378 residential units were sold, this year saw a decrease to 43,781 units. Despite this, the total sales value rose from Rs 38,102 crore in Q1 2024 to Rs 40,443 crore in Q1 2025.

PropEquity CEO Sameer Jasuja attributed this decline to reduced supply during the January-March quarter. He also noted that this trend was seen in Tier-1 cities as well. He explained that demand remains strong in Tier-2 cities, but the lack of new launches in this quarter impacted occupancy rates. Strong social infrastructure, better connectivity, and employment growth in sectors like IT and manufacturing are driving demand.

Region-wise sales performance in Q1 2025 showed:

• Central and Eastern cities like Bhopal and Bhubaneswar witnessed an 18% decline.
• Southern cities such as Visakhapatnam, Kochi, and Coimbatore recorded a 12% decrease.
• Northern cities including Lucknow, Jaipur, and Mohali saw a 14% drop.
• Western cities like Ahmedabad, Surat, and Vadodara experienced a 6% decline.

Despite the overall decline, sales in Western India remained relatively strong. Western cities accounted for 79% of the total units sold and 74% of the total sales value. Ahmedabad led this region, with 14,583 units sold worth Rs 13,565 crore. Sales here were only 1% lower compared to the first quarter of last year.

Among Tier-2 cities where sales fell sharply, Visakhapatnam was the hardest hit, with a 37% drop in units sold and a 35% decline in sales value. Sales also decreased in Surat, Vadodara, and Nagpur, although Vadodara and Nagpur saw only a marginal 1% decline in sales value.

The capital cities performed comparatively better. The six state capitals—Gandhinagar, Jaipur, Bhubaneswar, Lucknow, Goa, and Bhopal—outperformed the overall market. They recorded only a 5% decline in sales volume but a 17% increase in sales value. These cities contributed 25% of total unit sales and 30% of total transaction value.