New Data from PropEquity Highlights Regional Variations and Emerging Trends

New Delhi, October 21, 2024 — The housing market in India’s top 30 tier 2 cities has faced a substantial downturn in the third quarter of 2024, as revealed in a recent report by PropEquity, a prominent real estate data analytics firm listed on the NSE. Housing sales dropped by 13%, while new launches saw a staggering decline of 34%, reflecting a broader trend of contraction in the real estate sector.

A Closer Look at Sales and Launches

The report indicates that housing sales fell to 41,871 units during the July-September quarter, down from 47,985 units in the same period last year. New launches mirrored this trend, dropping from 43,748 units to 28,980 units. The West Zone, which includes cities such as Ahmedabad, Vadodara, and Surat, accounted for an impressive 72% of total sales and 71% of new launches, highlighting its dominance in the regional market.

Ahmedabad Leads the Pack

Ahmedabad emerged as a significant player, contributing 32% of total launches and 30% of total sales in the tier 2 market. However, the overall dip in the market is attributed to a “higher base effect,” according to Samir Jasuja, CEO & Founder of PropEquity. He noted that the exceptional performance of the real estate market in 2023 created a challenging comparison for 2024.

Diverging Trends Among Cities

While some cities have struggled, others have shown resilience. Notably, Lucknow, Mohali, and Bhopal experienced increases in launches, with Bhopal seeing a remarkable 268% rise. Conversely, cities like Jaipur, Goa, Bhubaneshwar, and Mysore reported significant declines in launches, with drops ranging from 3% to 61%.

Regional Breakdown of Performance

New Launches: Winners and Losers

The report also highlighted the cities with the most significant changes in new launches:

What Lies Ahead ?

The ongoing challenges in the housing market reflect broader economic trends, including rising costs and shifting demand dynamics. Jasuja pointed out that despite the setbacks, the availability of a skilled workforce, lower living costs, and improved infrastructure in state capitals continue to drive demand. However, he cautioned that sales and launches in tier 2 cities are currently only about one-third of the activity seen in the top ten cities.

As the real estate sector navigates these changes, stakeholders will need to adapt to the evolving landscape, focusing on strategic opportunities in cities that continue to show promise amidst a challenging market environment.