Housing Sales Increase in Tier-II Cities, 20% Growth Due to Higher Demand and Rising Prices

Housing sales in India’s top 15 tier-II cities saw a strong rise in 2024, growing by 20% in value terms and reaching over Rs 1.52 lakh crore, according to a report by real estate data analytics firm PropEquity. This growth was driven by a mix of increased home sales and rising property prices.

More Homes Sold, Higher Prices

The total number of homes sold in these cities went up by 4%, from 1,71,903 units in 2023 to 1,78,771 units in 2024. However, the jump in value terms was much higher, indicating that property prices have increased significantly.

According to PropEquity’s Founder & CEO, Samir Jasuja, the fact that the total sales value grew by 20% while the actual number of homes sold increased only by 4% shows that home prices have risen sharply. This is due to factors like increased construction costs and speculative investments. He also mentioned that recent Budget announcements are expected to further boost housing demand in tier-II cities while creating more job opportunities.

Cities Leading the Growth

The 15 cities covered in the report are Ahmedabad, Surat, Vadodara, Gandhinagar, Nashik, Jaipur, Nagpur, Bhubaneswar, Mohali, Visakhapatnam, Lucknow, Coimbatore, Goa, Bhopal, and Trivandrum.

Among these cities, Coimbatore recorded the highest increase in the number of homes sold, with a growth of 36% in 2024. On the other hand, Visakhapatnam saw the biggest decline, with sales dropping by 21% compared to the previous year.

In terms of sales value, Bhubaneswar led the way with a massive 47% rise, while Nashik saw a small decline of 2% in the total value of homes sold.

Ahmedabad Tops in Sales Value

Among all 15 tier-II cities, Ahmedabad recorded the highest total sales value. The city saw home sales worth Rs 49,421 crore in 2024, up 17% from Rs 42,063 crore in 2023. This indicates that Ahmedabad remains a top destination for homebuyers in smaller cities.

Why Are Home Sales Rising in Tier-II Cities?

Experts in the real estate industry believe that the strong demand for homes in tier-II cities is due to several reasons.

Madhur Gupta, CEO of Hero Realty, said that more job opportunities, a lower cost of living, and affordable housing options are attracting people to these cities. Yashank Wason, Managing Director of Royal Green Realty, added that many homebuyers are moving away from big cities due to overcrowding and a lack of good-quality housing. Instead, they are choosing tier-II cities where they can get better homes at more affordable prices.

Looking Ahead

The report suggests that housing demand in smaller cities will continue to grow, especially as more people look for affordable homes outside big metros. With improving infrastructure, increasing job opportunities, and government initiatives to support housing, tier-II cities are becoming the next big market for real estate development.

As home prices continue to rise, buyers in these cities may have to plan their purchases carefully. At the same time, developers will need to focus on delivering quality housing at competitive prices to meet the growing demand.