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Tier-2 Home Sales Drop 10% in 2025 With Value Flat

PropEquity attributes the cooling to a squeeze in sub-₹1 crore supply driven by higher land and construction costs.

Overview

  • Sales across the top 15 tier-2 cities fell to 1,56,181 units in 2025 even as aggregate transaction value held steady at ₹1.48 lakh crore, indicating larger average ticket sizes.
  • Homes priced below ₹1 crore saw a 15% decline and their share fell to 72%, while sales of ₹1 crore-plus homes rose 9% with share increasing to 28%.
  • New launches contracted 6% year-on-year to 1,36,243 units, with supply down in both sub-₹1 crore and above-₹1 crore segments as developers turned cautious.
  • Gujarat led activity with Ahmedabad, Surat, Vadodara and Gandhinagar accounting for about 63% of sales and 64% of launches; Ahmedabad alone sold 51,148 units and is recommended for tier‑1 status from 2026.
  • City-level outcomes diverged as Visakhapatnam fell 38% and Bhubaneswar and Vadodara also dropped sharply, while Mohali grew 34% and Lucknow rose 6%.