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Homes under Rs 50 lakh vanish as Tier 2 housing supply shrinks 35% in Q1

Homes under Rs 50 lakh vanish as Tier 2 housing supply shrinks 35% in Q1

Housing supply in India's top 15 tier 2 cities fell 35% to just 30,155 units in the January-March period of 2025 with 48% of the launches in the Rs 50 lakh to Rs 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 price range Rs 50L-1cr 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.
The report further added that the Eastern and Central India with 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 43% decline in supply in Q1 2025.
The seven State Capitals in the top 15 tier 2 cities saw 43% decline in supply in Q1 2025.
'The decline in supply is a result of cautious approach and shifting priorities by developers. Financially robust developers with strong balance sheet look to launch premium homes in order to increase their profit margin. As a result, supply of homes under Rs 50 lakh has seen a consistent decline due to its unviability. Meanwhile, homes priced between Rs 1-2 crore have not only seen a 17% Y-o-Y growth in supply but also its 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 Rs 50L-2cr priced homes in tier 2 cities," said Samir Jasuja, Founder and CEO, PropEquity.
Housing units priced under Rs 2 crore accounted for 95% of the total supply in Q1 2025, up from 87% in the same period last year.
The supply of units priced under Rs 50 lakh, more than halved to 7124 units in Q1 2025 as against 15420 units in the same period last year. Its share to total supply fell from 33% to 24% in Q1 2025.
Similarly, supply of units priced between Rs 50 lakh and Rs 1 crore dipped by 12% and its share rose from 36% to 48% in Q1 2025.
The supply of units priced between Rs 1-2 cr dipped by 17% and its share rose from 18% to 23% in Q1 2025.
Housing units priced under Rs 2 crore accounted for 95% of the total supply in Q1 2025, up from 87% in the same period last year.
Supply of units priced Rs 2 crore and above dipped by 73% in Q1 2025 and its share dipped from 13% to 5% in Q1 2025.
State Capitals saw 90% drop in supply of units priced under Rs 50 lakh and 13% drop in supply of units priced between Rs 50L-Rs 1 crore in Q1 2025. However, supply of units priced between Rs 1-2 crore rose by 31%.

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