Housing supply in the top 15 Tier-2 cities drops by 35% in Q1 2025, with 90% of the new inventory priced below ₹2 crore
Housing supply in the top 15 Tier-2 cities, including four cities of Gujarat, Ahmedabad, Gandhinagar, Surat, and Vadodara, fell by a whopping 35% to 30,155 units in the January-March period of 2025, with 48% of the supply in the ₹50L-1 crore price range, said a report by NSE-listed real estate data analytics firm PropEquity.
The supply stood at 45,901 units, with 36% of the launches in the price range of ₹50L-1crore in Q1 2024. Bhubaneshwar witnessed the highest decline, at 72% to 772 units in Q1 2025, while Nashik saw the least decline, at 2% to 2466 units.
In the Ahmedabad real estate market, the supply fell by 35% to 11,096 units from 17,108 units in Q1 2024. In terms of supply going up, Coimbatore is the only city witnessing a 127% increase in housing supply from 477 to 1,077, the report said.
Also Read: Housing sales in top 15 Tier 2 cities fall 8%, sales value up 6% in Q1 2025: Report
The report further added that Eastern and Central India, with a 68% fall in new launches in Q1 2025, saw the highest decline, followed by 55% in Northern India, 28% in Western India and 26% in Southern India. The seven State Capitals in the top 15 tier 2 cities saw a 43% decline in supply in Q1 2025.
Samir Jasuja, Founder and CEO, PropEquity, said, 'The decline in supply is a result of a cautious approach and shifting priorities by developers. Financially robust developers with a strong balance sheet look to launch premium homes in order to increase their profit margin. As a result, the supply of homes under ₹50 lakh has seen a consistent decline due to its unviability. Meanwhile, homes priced between ₹1-2 crore have seen supply share increasing from 18% to 23%.'
'With home loan rates hovering around 8-8.5%, the recent reduction of 50bps in repo rate by the RBI will further drive down the home loan rates, thereby providing an impetus in the ₹50L-2cr priced homes in tier 2 cities," Jasuja said.
'The tier 2 cities present a huge opportunity for corporates and developers as massive infrastructure development and the government's focus on making these cities as growth drivers will enable end-user demand," Jasuja said.
Also Read: Mumbai's unsold luxury housing inventory rises 36% in Q1 2025 after two-year decline: ANAROCK
Housing units priced under ₹2 crore accounted for 95% of the total supply in Q1 2025, up from 87% in the same period last year.
The report said the supply of units priced under ₹50 lakh more than halved to 7,124 units in Q1 2025, as against 15420 units in the same period last year. Its share of the total supply fell from 33% to 24% in Q1 2025.
Similarly, the supply of units priced between ₹50 lakh and ₹1 crore dipped by 12%, and its share rose from 36% to 48% in Q1 2025. The supply of units priced between ₹1-2 cr fell by 17% and its share rose from 18% to 23% in Q1 2025.
Also Read: Over 29,000 complaints filed by homebuyers against 5,500 real estate projects in Maharashtra: MahaRERA data
The supply of units priced ₹2 crore and above dipped by 73% in Q1 2025, and its share dipped from 13% to 5%. State Capitals saw a 90% drop in the supply of units priced under ₹50 lakh and a 13% drop in the supply of units priced between ₹50 lakh and ₹1 crore in Q1 2025.
However, the supply of units priced between ₹1-2 crore rose by 31%, the report said.
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