Tier 2 cities’ housing slumps in Q1: Affordable supply falls 54%, says report; developers shift focus to premium housing

NEW DELHI: The inexpensive housing phase in India’s 15 main tier 2 cities witnessed a pointy 54 per cent decline in the course of the January-March quarter (Q1) of 2025, in accordance to the most recent evaluation by actual property knowledge agency PropEquity, quoted by ANI. Overall new housing supply in these cities dropped by 35 per cent year-on-year to 30,155 items in Q1 2025, in contrast to 45,901 items throughout the identical interval final 12 months. Homes priced between Rs 50 lakh and Rs 1 crore comprised 48 per cent of the brand new launches this 12 months, up from 36 per cent in Q1 2024. Among particular person cities, Bhubaneshwar recorded the steepest fall, with a 72 per cent discount to 772 items. Nashik noticed the smallest dip, with a 2 per cent decline to 2,466 items. Regionally, Eastern and Central India witnessed the sharpest drop in new launches at 68 per cent, adopted by Northern India at 55 per cent, Western India at 28 per cent, and Southern India at 26 per cent. Supply in the seven state capitals among the many prime 15 tier 2 cities fell by 43 per cent. Samir Jasuja, Founder and CEO of PropEquity, mentioned the drop in supply displays a strategic shift by developers. (*2*) he mentioned. He additional added, “Meanwhile, homes priced between Rs 1-2 crore have not only seen a 17 per cent Y-o-Y growth in supply but also its supply share increasing from 18 per cent to 23 per cent.” According to Jasuja, dwelling mortgage charges presently stay in the vary of 8 to 8.5 per cent, however the RBI’s latest 50 foundation level repo fee lower is anticipated to decrease these charges additional, which may benefit properties priced between Rs 50 lakh and Rs 2 crore in tier 2 cities. He mentioned, “The tier 2 cities present a huge opportunity for corporates and developers as massive infrastructure development and government’s focus on making these cities as growth drivers will enable end-user demand.“ As per the info, 95 per cent of recent housing supply in Q1 2025 got here from items priced beneath Rs 2 crore, up from 87 per cent a 12 months in the past. The supply of properties below Rs 50 lakh noticed a major fall, dropping from 15,420 items in Q1 2024 to 7,124 items in Q1 2025, lowering their market share from 33 per cent to 24 per cent. Units priced between Rs 50 lakh and Rs 1 crore declined by 12 per cent in quantity however rose in share from 36 per cent to 48 per cent. Properties in the Rs 1–2 crore vary declined 17 per cent in quantity, although their share elevated from 18 per cent to 23 per cent. Homes priced above Rs 2 crore noticed a steep 73 per cent fall in supply, shrinking their share from 13 per cent to 5 per cent. In the seven state capitals, supply of properties beneath Rs 50 lakh dropped by 90 per cent, whereas items in the Rs 50 lakh to Rs 1 crore class declined by 13 per cent. However, the Rs 1–2 crore phase noticed a 31 per cent improve in supply in the course of the quarter.