The total housing sales value across the top 15 tier-2 cities remained flat at ₹1.48 lakh crore in 2025, even as sales volumes declined 10% year-on-year to 1,56,181 units.
The divergence between value and volume indicates that higher-ticket homes are increasingly driving overall transaction value, even as the number of units sold declines.
Premiumisation shapes demand
The report shows a clear shift toward homes priced above ₹1 crore across tier-2 markets.
Homes priced below ₹1 crore saw a 15% decline in sales volumes in 2025. Their share dropped from 77% in 2024 to 72% in 2025.
Homes priced above ₹1 crore recorded 9% growth in sales. Their share increased from 23% to 28%
This suggests that premiumisation is becoming a defining trend in tier-2 housing markets, similar to what has been observed in major metropolitan cities in recent years.
Most cities see lower sales volumes
Sales volumes declined across 13 of the 15 tier-2 cities tracked in the report, with Visakhapatnam recording the steepest drop.
Only two cities bucked the trend:
Mohali, where sales rose 34% year-on-year
Lucknow, where sales increased 6%
The slowdown in volumes reflects rising housing prices and affordability pressures, even as demand for premium homes remains resilient.
Gujarat markets dominate sales
The report highlights the strong performance of Gujarat’s residential markets.
The four cities of Ahmedabad, Gandhinagar, Vadodara and Surat together accounted for 63% of total housing sales across the top 15 tier-2 cities.
In absolute terms, the four cities of Gujarat, namely Ahmedabad, Gandhi Nagar, Vadodara and Surat, together accounted for 63% of the total sales in top 15 tier 2 cities, with Ahmedabad alone contributing 33% with 51,148 units sold.
Ahmedabad emerging as a tier-1 housing market
According to the report, Ahmedabad’s scale of launches and demand absorption now places it alongside major urban markets, suggesting the city could be considered a tier-1 residential market from 2026 onward.
“The slowdown in housing sales over the past two years is largely due to a shrinking supply of homes priced below ₹1 crore-a segment that has traditionally driven demand in tier-2 cities. Rising land and construction costs, along with changing buyer aspirations, are pushing new launches into higher price brackets. As a result, tier-2 markets are increasingly mirroring tier-1 cities, where volumes are declining even as prices continue to rise,” said “Samir Jasuja, Founder & CEO of PropEquity.
New supply across the top 15 tier-2 cities declined by 6% to 1,36,243 units in 2025, down from 1,45,139 units in 2024. The contraction was seen across price segments, with supply of homes priced under ₹1 crore declining by 5%, and those above ₹1 crore falling by 8%.
Mohali (108%), Bhopal (66%), Ahmedabad (3%) and Jaipur (2%) saw growth in new launches while the other 11 cities saw a decline of up to 57% with Bhubaneshwar witnessing the steepest decline.
The four cities of Gujarat accounted for 64% of the total launches in 2025.
” Government focus on tier-2 cities—through enhanced urban development, improved connectivity, and the creation of industrial corridors and manufacturing hubs-has driven sustained price appreciation. This has pushed even average housing units in many tier-2 markets beyond the ₹1 crore mark, leading to slower absorption. Going forward, this trend could be a cause for concern, as affordability pressures begin to impact not just premium segments but also affordable and mid-income housing in these cities,” said Jasuja.
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