Housing sales in India’s top 15 tier 2 cities dropped by 8% year-on-year in the first quarter of 2025, according to a report by real estate data analytics firm PropEquity. A total of 43,781 units were sold in Q1 2025 compared to 47,378 units in Q1 2024. However, despite the dip in volume, sales value rose by 6%, touching Rs 40,443 crore, up from Rs 38,102 crore a year earlier.
Lucknow leads in sales growth, Visakhapatnam sees sharpest decline
Among the 15 cities, Lucknow recorded the highest growth in housing sales at 25%, with 1,301 units sold in Q1 2025. Coimbatore followed closely with a 21% rise, while Gandhi Nagar and Mohali registered 18% and 2% increases, respectively.
On the flip side, Visakhapatnam saw the steepest fall, with a 37% decline in unit sales. Bhopal and Jaipur followed with 31% and 32% drops, respectively. Cities like Ahmedabad and Goa recorded minimal declines of 1%.
Sales value rises despite dip in volumes
Interestingly, even as the number of units sold declined, the sales value surged, suggesting a rise in property prices or a shift toward premium housing. Coimbatore led the value chart with a 52% increase, reaching Rs 1,120 crore in Q1 2025. Lucknow posted a 48% growth, followed by Gandhi Nagar (36%), Mohali and Goa (17% each), and Ahmedabad and Bhubaneshwar (7% each).
Meanwhile, Visakhapatnam again saw the highest dip in value at 35%, with Bhopal (24%) and Jaipur (10%) trailing. Vadodara and Nagpur saw marginal declines of just 1% each.
State capitals show resilience
The six state capitals in the report—Gandhi Nagar, Jaipur, Bhubaneshwar, Lucknow, Goa, and Bhopal—saw a 5% drop in unit sales but a significant 17% increase in sales value. These cities together accounted for 25% of total units sold and 30% of the total sales value in Q1 2025, underscoring their importance in the tier 2 market.
Northern cities show promise
Regionally, Western India (Ahmedabad, Surat, Vadodara, Gandhi Nagar, Nashik, Nagpur, Goa) reported a 6% decline in sales volume but a 6% rise in value. Northern India (Lucknow, Jaipur, Mohali) saw a 14% drop in sales but a 14% increase in value, indicating strength in pricing or buyer preference for premium segments.
Southern India (Visakhapatnam, Kochi, Coimbatore) experienced a 12% drop in unit sales and a marginal 1% drop in value. Central and Eastern India (Bhopal and Bhubaneshwar) reported an 18% drop in volume, while value remained flat.
Tier 2 demand remains strong
Samir Jasuja, Founder and CEO of PropEquity, attributed the volume dip to reduced supply rather than a drop in demand. He emphasised that tier 2 cities continue to benefit from urban infrastructure upgrades, IT and manufacturing growth, and reverse migration trends.
With the RBI cutting repo rates by 50 bps since January 2025 and further rate cuts expected, housing demand in tier 2 cities is likely to rebound, particularly as home loans become more affordable.