Housing sales in tier 2 cities down 13%, Bhubaneshwar sees worst decline

Housing sales in India's top thirty tier II cities fell 13 per cent in the July-September quarter of 2024 while new launches have declined by 34 percent,  according to a report by NSE-listed real estate data analytics firm PropEquity.

Housing sales fell to 41,871 units in Q3 2024 against 47,985 units in the same period last year while launches fell to 28,980 units in July-September quarter of 2024 from 43,748 units in the same period last year, the report said.

The west zone comprising Ahmedabad, Vadodara, Gandhinagar, Surat, Goa, Nashik and Nagpur, contributed 72% to the total sales.

Why the decline? 

 “The decline in sales and launches is on account of higher base effect as year 2023 had recorded historic highs. The low cost of living, availability of skilled workforce and advantageous operational cost for companies besides good connectivity and infrastructure in state capitals have been driving demand for homes. However, as seen from an all-India context, the top 30 tier 2 cities have been underperforming as sales and launches with respect to top ten cities are only 1/3," said Samir Jasuja, CEO & Founder, PropEquity.

According to the report, the top three cities that witnessed maximum drop in launches were Sonepat, Panipat and Agra. Only 8 cities saw growth in new launches with top three being Bhopal (268%) followed by Dehradun (100%) and Coimbatore

(77%). West Zone contributed 71% to the total launches.

Among state capitals, Bhopal witnessed the maximum rise in new launches at 268% while Trivandrum saw maximum decline in new launches at 87%. Similarly, Dehradun saw maximum rise in sales at 47% while Bhubaneshwar and Chandigarh saw

maximum decline in sales at 18% each.

Key Findings:

Total Absorption: The overall absorption fell from 47,985 units in Q3 2023 to 41,871 units in Q3 2024. This indicates a year-on-year decrease of 13%.

Cities with Notable Declines:

• Sonepat: Experienced a dramatic 54% drop, with absorption down to 37 units.
• Panipat: Also reported a 59% decline, seeing zero new launches.
• Agra: Saw a 33% decrease, with absorption falling to 128 units
• Growth in Few Areas: While most cities faced a downturn, a few cities showed positive growth:
• Bhopal: Remarkably increased by 268%, reaching 744 units.
• Dehradun: Doubled its figures with a 47% increase to 255 units.
• Coimbatore: Grew by 23%, absorbing 821 units.
• New Supply Analysis:
• In terms of new supply, the numbers tell a similar story. The total new supply dropped sharply from Q3 2023’s 37,052 units to just 22,570 units in Q3 2024.

Cities with Major Drops:

• Agra: Registered a complete drop, with new supply falling to zero.
• Nashik: Saw a staggering 65% decrease, down to 1,290 units.
• Ludhiana: Experienced an 87% decline, with only 44 units launched.

Cities with Increases in New Supply:

• Bhopal: Surged by 268%, with 592 new units launched.
• Coimbatore: Saw a 77% rise, with 909 new units.
• Dehradun: Reported 179 new units, marking a 100% increase.

Total absorption