Sales value of tier-II properties rises despite a fall in transactions during Q1 2025

Tier-2 housing: Sales value surges 6% despite 8% dip in transactions in Q1 2025; Lucknow leads growth

Even as the housing sales volume in India's top 15 tier-II cities dipped 8 percent on-year to 43,781 units in Q1 2025, the property market has defied expectations with a 6 percent surge in sales value, at Rs 40,443 crore, data by real estate data analytics firm PropEquity has shown.

Lucknow emerged as the standout performer registering a 25 percent rise in units sold (1,301 units), with Coimbatore (21 percent), Gandhinagar (18 percent), and Mohali (2 percent) also seeing growth, said PropEquity.

However, most tier-II cities faced a downturn in sales volume, with Visakhapatnam experiencing a 37 percent drop, and Ahmedabad and Goa showing reductions of nearly a percent each.

Sales value of properties sold rose by 6 percent to Rs 40,443 crore in Q1 2025 as against Rs 38,102 crore in the same period last year.

Coimbatore, with 52 percent growth, saw the highest increase in sales value at Rs 1,120 crore in Q1, 2025, followed by Lucknow at 48 percent, Gandhi Nagar 36 percent, Mohali and Goa at 17 percent each, Ahmedabad and Bhubaneshwar at 7 percent each and Kochi 5 percent.

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Other cities saw a decline in sales value in Q1 2025 with Visakhapatnam recording the highest drop (35 percent) and Vadodara and Nagpur registering the least decline of one percent each.

“The decline in sales in tier-II cities in January-March is in line with trends witnessed in tier-I cities. However, lesser supply in this quarter resulted in lower sales in tier-II cities. Demand in tier-II cities, however, remains robust as people have shown greater preference for organised living,” Samir Jasuja, Founder and CEO, PropEquity said.

Jasuja said urban rejuvenation efforts, improved connectivity and social infrastructure, along with greater employment opportunities - mainly in IT and new manufacturing hubs in tier-II cities - have further accelerated property demand in these hubs.

“RBI has made 50 bps cut in repo rate since January 2025 and is expected to cut rates further. As this gets transmitted by banks, homes loans will decline going forward thereby giving a boost to housing demand,” PropEquity CEO added.

The six state capitals in top 15 tier-II cities, namely Gandhi Nagar, Jaipur, Bhubaneshwar, Lucknow, Goa and Bhopal, saw 5 percent decline in sales and 17 percent increase in sales value, accounting for 25 percent of sales and 30 percent of sales value in Q1 2025.

Region-wise Trend

Western India, comprising Ahmedabad, Surat, Vadodara, Gandhi Nagar, Nashik, Nagpur and Goa, saw a 6 percent decline in the number of units sold in Q1 2025. However, sales value rose by 6 percent in Q1 2025.

Northern India, comprising Lucknow, Jaipur and Mohali saw a 14 percent decline in number of units sold in Q1 2025 while sales value rose by 14 percent.

Southern India, comprising Visakhapatnam, Kochi and Coimbatore, saw 12 percent decline in number of units sold and 1 percent decline in sales value in Q1 2025.

Central and Eastern India, comprising Bhopal and Bhubaneshwar, saw 18 percent decline in number of units sold in Q1 2025. However, sales value remained flat.