Housing supply in top 15 tier 2 cities falls by 35% in Q1 2025

New Delhi : Housing supply in India’s top 15 tier 2 cities fell by a whopping 35% to 30,155 units in January-March period of 2025 with 48% of the launches in the Rs 50L-1 cr 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. Samir Jasuja, Founder and CEO, PropEquity said, “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.”

“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.”