News: Tier-2 Home Sales Volumes Fall 10% in 2025: PropEquity-12-02-2026
Housing sales in India’s top 15 tier-2 cities were steady by value at Rs 1.48 lakh crore in 2025, but volumes fell 10% year on year to 1,56,181 units as prices rose and the market turned more premium, according to NSE-listed analytics firm PropEquity.
Visakhapatnam recorded the sharpest fall at 38%, followed by Bhubaneswar at 25% and Vadodara at 19%. Only Mohali, up 34%, and Lucknow, up 6%, grew.
Sales of homes priced below Rs 1 crore fell 15%, and their share slipped to 72% from 77% in 2024. Homes above Rs 1 crore grew 9%, lifting their share to 28% from 23%.
New supply declined 6% to 1,36,243 units from 1,45,139 in 2024, with launches under Rs 1 crore down 5% and those above down 8%. Mohali (108%), Bhopal (66%), Ahmedabad (3%) and Jaipur (2%) saw more launches; the other 11 cities fell by up to 57%, Bhubaneswar the most. Gujarat’s four cities contributed 64% of launches.
PropEquity said Ahmedabad can be treated as a tier-1 city from 2026, having overtaken several established tier-1 markets in launches and absorption.
Founder and CEO Samir Jasuja said the two-year slowdown stems largely from shrinking supply below Rs 1 crore, the segment that has traditionally driven tier-2 demand. Higher land and construction costs and changing aspirations are pushing launches upmarket, so these cities increasingly resemble tier-1 markets where volumes fall as prices rise.
Government emphasis on urban development, connectivity, industrial corridors and manufacturing hubs has driven sustained appreciation, taking even average units in many tier-2 markets past Rs 1 crore and slowing absorption. He warned this could become a concern as affordability pressure spreads to affordable and mid-income housing.
