Housing sales in top 30 tier-II cities grew 11% in FY24; Chandigarh grew 89%

Housing sales in top 30 tier-II cities grew by 11% YoY in FY24, Chandigarh records 89% jump in sales followed by Dehradun

Housing sales across the top 30 tier-II cities increased 11 percent during the last fiscal year on account of high consumer demand driven by economic growth, infrastructure development, and an increasing desire for home ownership, according to the real estate data analytics firm PropEquity.

Housing sales  in 30 major tier-II cities stood at 2,07,896 units in FY2023-24 versus 1,86,951 units in the preceding financial year.

Chandigarh witnessed the highest year-on-year (YoY ) jump in housing sales  — 89 percent — followed by Dehradun at 82 percent, while Bhubaneswar saw a 58 percent spike. Western India accounted for 69 percent of the sales, followed by the south (10.5 percent). Gujarat's  major cities also saw huge housing demand, the report highlighted.

Also Read: Housing sales fall 18% in Q2 2024, Hyderabad sees biggest dip, followed by Mumbai

Some of the top 30 tier-II cities that saw a spurt in sales are Ahmedabad, Bhubaneswar, Nagpur, Gandhinagar, Surat, Jaipur, Visakhapatnam, Vadodara, Nasik, Chandigarh, Lucknow, Dehradun, Trivandrum, Kochi, Coimbatore, Mysore, Bhopal, Indore, and Raipur.

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Samir Jasuja, Founder and Managing Director, PropEquity, said that tier-II cities performed better than tier-I cities  due to lower property prices and growth potential.

“Furthermore, these cities are also experiencing an economic boom thanks to the proliferation of SME (small and medium enterprise)  businesses. Government push on infrastructure creation is another major reason for rising demand in tier-II cities. All these factors are creating a bullish environment for real estate,” Jasuja said.

According to the report, the west zone, comprising tier-II cities like Ahmedabad, Vadodara, Surat, Nashik, Gandhinagar, Nagpur, and Goa,  reported sales of 1,44,269 residential units in FY 2023-24, up 11 percent from the 1,29,423 homes sold in FY 2022-23.

The north zone, which includes the tier-II cities of Jaipur, Mohali, Lucknow, Chandigarh, Dehradun, Agra, Ludhiana, and Amritsar, reported sales of 26,308 residential units in FY24, up 8 percent from 24,273 units in FY23.

Also Read: Unsold housing stock down 16% YoY in Q1CY24 in Tier-1 cities, sales up 8%: PropEquity

The south zone, comprising cities like Visakhapatnam, Trivandrum, Coimbatore, Kochi, Vijayawada, Mangalore, Guntur, and Mysore,  reported sales of 21,947 residential units in FY 2023-24, up 8.4 percent from the 20,244 residential properties sold in FY 2022-23.

Similarly, the east and central zone (zone or zones?), which includes cities such as Bhubaneswar, Bhopal, Indore, and Raipur, reported sales of 15,372 units in FY24, up 18 percent from 13,011 homes sold in FY23, the report said.

Manish Jaiswal, Group COO, Eldeco, said that with housing sales rising 11 percent in the top 30 tier-II cities in FY24, the country is witnessing significant transformation driven by enhanced infrastructure and improved connectivity.

Also Read: Year-ender 2023: Housing sales hit a peak of 4.76 lakh units, up 31 percent on-year

"The rise in demand is supported by the robust development of amenities and the increasing preference for premium housing, reflecting the evolving aspirations of residents in these cities. Looking ahead, the future of this market appears promising, with continued expansion and development expected to sustain this upward trajectory," Jaiswal said.

Eldeco has a number of residential projects in tier-II cities like Ludhiana, Rudrapur ,and Sonipat.