Housing sales and new project launches in India’s top 30 Tier 2 cities have witnessed a steep decline in the third quarter of 2024 (Q3’24 July-September). According to the latest report by PropEquity, a real estate data analytics firm, housing sales dipped by 13 per cent year-on-year to 41,871 units in Q3’24 from 47,985 units in the same period last year (Q3’23).
New launches in these cities also plunged by 34 per cent to 28,980 units from 43,748 units during the same period. Samir Jasuja, CEO and founder of PropEquity notes that this slowdown is due to a higher base effect since 2023 had recorded historic highs.
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“The low cost of living, availability of skilled workforce, and advantageous operational cost for companies besides good connectivity and infrastructure in State Capitals have been driving demand for homes,” he states.
Regional Decline: What Does The Data Say?
The report noted that the western zone of India, which includes cities like Ahmedabad, Vadodara, Surat, and Nagpur has the strongest contribution, around 72 per cent, to the total housing sales. However, despite such numbers, this region was not immune to the downward growth. For instance, Ahmedabad saw an 8 per cent drop in housing sales wherein the total sale of units fell to 12,721 units in Q3 2024 from 13,855 units in the same quarter last year.
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Maharashtra’s Nasik and Nagpur also saw a 25 per cent and 15 per cent decline respectively.
In terms of new launches, the western region contributed to 71 per cent of the total new supply. Here, Ahmedabad’s new supply dropped by 25 per cent and Vadodara saw a visible decline in new projects by 24 per cent.
A few cities managed to buck this trend such as Coimbatore which saw a 23 per cent increase in sales, and Dehradun, where sales rose by as much as 47 per cent.
“As seen from an all-India context, the top 30 tier 2 cities have been underperforming as sales and launches with respect to top ten cities are only ⅓,” Jasuja explains.
Which Cities Saw The Steepest Decline?
As per the data, Sonepat, Panipat, and Agra saw the worst drops in new launches. Agra saw a complete drop in new project launches at 100 per cent going from 64 units in Q3’23 to zero in Q3 2024. Panipat and Sonipat braced a similar downfall with no new supply being recorded in the last quarter.
Amritsar saw the sharpest decline in housing sales with a 92 per cent drop followed by Ludhiana and Mysore which saw sales plummet by 41 per cent and 61 per cent respectively. These figures point to a challenging market for both developers and buyers.
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Are There Any Winners?
Though most Tier 2 cities have visibly struggled, few areas did manage to show some resilience. Bhopal, for instance, showed a good performance among all state capitals, witnessing a 268 per cent increase in new project launches. The units in this city rose from 161 units in Q3’23 to 592 in Q3 2024. Similarly, Dehradun also saw a 100 per cent increase in new launches with the number rising from zero to 179 units.
Sales numbers in these markets were also promising wherein Dehradun topped the list with a 47 per cent increase in housing sales while Coimbatore closely followed suit with a 23 per cent rise.
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The reason for such a performance in the cities puts them into light as emerging real estate hubs where the buyers relatively benefit from lower property prices and improved infrastructure.
