Bangalore, known for its booming IT industry and vibrant culture, has been a focal point for real estate investments in recent years. However, recent reports indicate that housing sales in the top 15 tier 2 cities of India have experienced a 4% year-on-year decline, with total sales dropping to 39,201 units in Q3 2025. Interestingly, while the number of units sold decreased, the total sales value saw a 4% increase, reaching Rs 37,409 crore, signalling a shift towards premium properties.
A closer look reveals that the decline in sales is accompanied by a 10% drop in new housing launches, which fell to 28,721 units during the same period. Notably, eight out of the fifteen cities reported a year-on-year decline in sales, with Bhubaneshwar experiencing the most significant drop at 26%. Conversely, Trivandrum stood out with a remarkable 19% increase in sales, showcasing the varied dynamics across these cities.
The report from PropEquity highlights that despite the overall decline, Ahmedabad continues to shine as a leading market, dominating both sales and new launches in Q3 2025. However, it's essential to note that Bhubaneshwar faced the steepest decline in new launches, plummeting by 88%. This trend indicates a potential challenge for developers in these regions, as input costs rise and consumer aspirations evolve, leading to higher home prices and sizes.
Moreover, a quarter-on-quarter analysis reveals a 3% decrease in housing sales and a 1% decline in sales value, alongside a staggering 26% drop in new launches in Q3 2025. Samir Jasuja, Founder and CEO of PropEquity, notes that this steady decline in new housing launches, particularly in the affordable and mid-income segments, is a critical factor affecting market dynamics. He emphasizes that despite these challenges, tier 2 cities are crucial to India's growth, driven by expanding employment opportunities and enhanced infrastructure.
The four cities in Gujarat—Ahmedabad, Surat, Gandhi Nagar, and Vadodara—continue to dominate the tier 2 market, contributing to over 60% of sales and launches. As these cities maintain their strength in the real estate sector, the overall landscape of housing in India’s tier 2 cities remains complex, warranting close observation and strategic planning by stakeholders in the industry.