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The new housing supply across 15 major tier-II cities in India fell by 35% to 30,155 units in the first quarter of 2025, as per data by PropEquity. Developers adopted a more cautious approach amid rising input costs and funding constraints, shifting focus toward premium housing. Ahmedabad, Surat, Jaipur, and Bhubaneshwar were among the cities witnessing the steepest declines, while only Coimbatore showed an upward trend. Industry experts noted that this shift reflects a recalibration of strategies, with a tilt towards biophilic and sustainable housing concepts, and stronger demand for homes priced between INR 1-2 crore.
The first quarter of 2025 saw a notable slump in the new housing supply across 15 major tier-II cities in India, with total launches dropping by 35% to 30,155 units, according to real estate analytics firm PropEquity. This marked a significant decline from 45,901 units reported during the same period last year. Advertisement
PropEquity's Founder and CEO, Samir Jasuja, attributed the slowdown to a shift in strategy among developers, who have become more selective in launching new projects. He noted that financially sound builders are increasingly turning toward premium housing developments to boost profit margins.
Among the worst-hit cities was Ahmedabad, which recorded a 35% decline in new supply, falling to 11,096 units. Surat experienced an even sharper 39% drop, reaching 3,309 units, while Jaipur saw a dramatic 55% plunge to just 1,348 units. Other significant drops were observed in Bhubaneshwar (down 72% to 772 units), Trivandrum (down 71% to 217 units), and Mangalore (down 64% to 269 units).
Lucknow and Nagpur saw declines of 55% and 28% respectively, while Nashik and Gandhinagar faced more moderate contractions of 2% and 10%. Vadodara's housing supply shrank by 23%, and Goa witnessed a 24% fall. In Kochi, supply reduced by 49% to 225 units. Bhopal also saw a drop of 51%, reaching just 365 units.
The sole exception to this trend was Coimbatore, where the new housing supply rose significantly to 1,077 units, up from 475 units last year?marking a more than twofold increase.
Rajat Khandelwal, Group CEO of Tribeca Developers, pointed out that developers are recalibrating their project pipelines amid growing construction costs, funding challenges, and varying demand across cities. This has led to a restrained approach in new launches.
Kirthi Chilukuri, Founder and MD of Stonecraft Group, remarked that this slowdown marks a strategic turning point for the real estate industry. He explained that developers with a long-term vision are exploring sustainable and biophilic housing concepts that blend design with nature, aiming to create vibrant and livable communities.
Vijay Harsh Jha, founder of VS Realtors, noted that premium homes priced between INR 1-2 crore have gained popularity in these markets. However, he expressed concern over the weakening supply of budget homes around INR 50 lakh, especially as these cities continue to attract new residents for employment opportunities. He maintained that the slowdown is temporary, and the overall demand in tier-II cities remains resilient.
Source: PTI
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