Housing Sales Rise 11% in Tier II Cities during 2023-24: Report

In a significant uptick reflecting growing consumer confidence and economic resilience, housing sales in India’s top 30 Tier II cities rose 11 per cent to nearly 2.08 lakh units in the financial year 2023-24, according to data analytics firm PropEquity. The increase in sales underscores a robust demand for residential properties driven by multiple factors including economic growth, infrastructure advancements, and the increasing desire among middle-class families to own homes.

According to PropEquity’s report, the momentum in housing sales extends beyond the traditionally dominant Tier I cities, indicating a broad-based expansion in the real estate sector. Notably, the top-10 cities within these Tier II segments contributed a substantial 80 per cent to the overall sales figures.

According to the data, the sales of housing units in India’s 30 major tier II cities stood at 2,07,896 units in 2023-24 as against 1,86,951 units in the preceding financial year.

West zone accounted for nearly 70 per cent to the total sales in 30 tier II cities. Major Cities falling in the state of Gujarat saw huge demand.

PropEquity tracks over 1,70,000 projects of 57,000 developers across 45 cities in the country.

Samir Jasuja, founder and managing director at PropEquity, said, “Tier-II cities performed better than Tier-I cities due to lower property prices and growth potential. On the other hand, Affordability makes the dream of owning a home a reality for a growing middle class. Furthermore, these cities are also experiencing economic booms due to setting up of small and medium enterprises (SME) businesses and industries. Government push on infrastructure creation is another major reason for rising demand in Tier II cities. All these factors are creating a bullish investment.”

Top 10 tier II cities – Ahmedabad, Vadodara, Surat, Nashik, Gandhi Nagar, Jaipur, Nagpur, Bhubaneshwar, Visakhapatnam, and Mohali – reported sales of 1,68,998 residential units in 2023-24, up 11% from 1,51,706 homes in 2022-23.

Housing sales in West Zone — Ahmedabad, Vadodara, Surat, Nashik, Gandhi Nagar, Nagpur, and Goa — reported sales of 1,44,269 residential units in 2023-24, up 11% from 1,29,423 homes in 2022-23.

Housing sales in North Zone — Jaipur, Mohali, Lucknow, Bhopal, Chandigarh, Dehradun, Bhiwadi, Ludhiana, Agra, Sonepat, Panipat, and Amritsar — reported sales of 26,308 residential units in 2023-24, up 8% from 24,273 homes in 2022-23.

Housing sales in South Zone — Visakhapatnam, Trivandrum, Coimbatore, Kochi, Vijayawada, Mangalore, Guntur and Mysore — reported sales of 21,947 residential units in 2023-24, up 8.4% from 20,244 homes in 2022-23.

What Industry Players Say

Madhusudan G, chairman and managing director of Sumadhura Group, said, “PropEquity’s latest report highlights a thriving Tier 2 residential market, with housing sales up 11% in Q1 2024. Although the second quarter of 2024 experienced a temporary slump in Tier 1 cities due to the Lok Sabha elections, Tier 2 cities are outperforming Tier 1 cities primarily because of their affordability, which allows the aspirational middle class to own their dream homes in these cities.”

Furthermore, the impressive growth fueled by SMEs and industries signals positive prospects. Additionally, mega public infrastructure projects are driving up housing demand in these developing cities, he added.

Manish Jaiswal, Group chief operating officer of Eldeco, said, “With housing sales rising by 11% in the top 30 Tier-2 cities in FY2024, we are witnessing a significant transformation driven by enhanced infrastructure and improved connectivity.”

This growth highlights Eldeco’s strategic investments in Tier-2 cities like Ludhiana, Rudrapur and Sonipat, making them attractive destinations for both homebuyers and investors. The rise in demand is supported by the robust development of amenities and the increasing preference for premium housing options, 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, he added.

Yashank Wason, managing director of Royal Green Realty, said, “The 11% surge in housing sales in the top 30 Tier 2 cities in FY2024 highlights their growing importance in the real estate sector. This growth is fueled by enhanced connectivity, infrastructure development, and strategic urban planning. Cities like Bahadurgarh benefit from initiatives such as the “Golden Ring” network, linking Delhi-NCR to emerging cities like Sonipat, Alwar, Meerut, and Manesar, thereby expanding their economic and investment potential.”