In 2024, the housing market in India's top 15 tier-II cities saw a remarkable surge, with sales rising by 20% in value terms, totaling Rs. 1.52 Lakh Crore (US$ 17.56 billion), according to a report from PropEquity, a real estate data analytics firm. The real estate market has been influenced by both increased property prices and a modest growth in sales volume, which increased by 4% from 1,71,903 units in 2023 to 1,78,771 units in 2024.

Among the cities that witnessed a substantial boost in sales, Coimbatore led the charge with a 36% increase in the volume of units sold, highlighting the growing demand in this region. On the other hand, Visakhapatnam experienced a 21% decline in its sales, which has raised concerns about local market conditions.

As property prices continue to rise, particularly due to rising raw material costs and the influx of speculative investments, the overall sales figures reflect a shift in demand towards tier-II cities. This trend is further expected to gain momentum as the upcoming budget announcements are anticipated to stimulate economic growth and create employment opportunities in these regions.

Among the 15 tier-II cities analyzed, Ahmedabad emerged as the leader in terms of sales value, achieving Rs. 49,421 Crore (US$ 5.69 billion) in sales—a 17% increase from the previous year. Meanwhile, Bhubaneswar reported the highest growth in sales value, with a 47% rise, underlining the increasing appeal of these cities to homebuyers.

Several factors have contributed to the strong performance of the tier-II housing market. Notably, the lower cost of living, coupled with improved housing supply in these regions, has made them increasingly attractive to homebuyers. As tier-I cities like Mumbai, Delhi, and Bangalore become more congested and expensive, many homebuyers are looking to move to tier-II cities for better opportunities and improved quality of life.

Experts like Mr. Samir Jasuja, the Founder and CEO of PropEquity, believe that the 20% rise in sales value, despite only a 4% increase in volume, is a clear indication of the growing property prices. He also pointed out that speculative investments in real estate have contributed significantly to this surge.

Nashik, one of the 15 cities analyzed, reported a 2% drop in its sales value, a sign that some cities are still facing challenges in maintaining growth. Meanwhile, Jaipur and Nagpur reported steady growth, benefiting from the overall positive momentum in the region.

Key Takeaways:

• The overall housing sales in top tier-II cities increased by 20% in 2024, reaching Rs. 1.52 Lakh Crore (US$ 17.56 billion).
• Cities like Coimbatore saw substantial growth in sales volume, while Visakhapatnam faced declines in sales.
• Bhubaneswar led in value growth, experiencing a 47% increase in sales, highlighting the region's potential.

The real estate market in India’s tier-II cities is expected to continue flourishing, driven by affordable living costs, improved infrastructure, and increased demand. As the market continues to evolve, it’s important to watch for policy announcements and economic initiatives that could impact these regions.

As property prices continue to climb, homebuyers are likely to gravitate toward tier-II cities in search of better value and opportunities. Tier-I cities like Mumbai and Delhi may see slower growth as more people opt for homes in affordable locations.

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