Tier II realty sales dip in Q1 but Lucknow bucks trend with 48% value jump

While housing sales across India’s top 15 tier 2 cities dropped 8% year-on-year in Q1 2025, Lucknow bucked the trend with a 25% surge in residential unit sales, according to a report by real estate data analytics firm PropEquity.

 

The city recorded 1,301 units sold — the highest growth among tier 2 cities — alongside a 48% jump in sales value to Rs 1,797 crore, driven by strong demand for organized housing, improved infrastructure, and growing employment opportunities.  According to the report, Lucknow with 25% increase in number of units sold in Q1 2025 at 1301 units registered the highest growth amongst top 15 tier 2 citiesdhinagar (18%), and Mohali (2%). However, the overall tier 2 market saw a contraction, with sales volume falling to 43,781 units from 47,378 in Q1 2024, even as sales value rose 6% to ₹40,443 crore.

 

 

Ahmedabad retained its top position in terms of total units sold (14,583 units) and sales value (₹13,565 crore). Western India, including Ahmedabad, Surat, and Gandhinagar, contributed 79% of total units sold and 74% of the overall sales value.

 

State capitals — including Lucknow, Jaipur, Gandhinagar, Bhubaneswar, Goa, and Bhopal — accounted for 25% of all sales and 30% of the total sales value, showing a 17% increase in revenue despite a 5% drop in sales volume.  As seen in the table below, the six State Capitals in top 15 tier 2 cities, namely Gandhi Nagar, Jaipur, Bhubaneshwar, Lucknow, Goa and Bhopal, saw 5% decline in sales and 17% increase in sales value, accounting for 25% of sales and 30% of sales value in Q1 2025. 

 

Region-wise highlights:

 

Western India, comprising Ahmedabad, Surat, Vadodara, Gandhi Nagar, Nashik, Nagpur and Goa, saw 6% decline in number of units sold in Q1, 2025. 

However, sales value rose by 6% in Q1, 2025. 

Northern India, comprising Lucknow, Jaipur and Mohali saw 14% decline in number of units sold in Q1, 2025.

However, sales value rose by 14% in Q1, 2025. 

Southern India, comprising Visakhapatnam, Kochi and Coimbatore, saw 12% decline in number of units sold and 1% decline in sales value in Q1, 2025. 

Central and Eastern India, comprising Bhopal and Bhubaneshwar, saw 18% decline in number of units sold in Q1, 2025. However, sales value remained flat.

 

 

 “The decline in sales in tier 2 cities in January-March period is in line with trends witnessed in tier 1 cities. However, lesser supply in this quarter resulted in lower sales in tier 2 cities. State Capitals performed relatively better," said Samir Jasuja, Founder and CEO, PropEquity.

 

He added that the dip in transactions is partly due to lower new supply. “Despite a slowdown in sales volume, demand in tier 2 cities is strong, fueled by infrastructure upgrades, job growth, and falling interest rates. We expect a rebound as banks pass on recent RBI rate cuts.”

 

PropEquity tracks data from over 1.7 lakh real estate projects across 44 cities, providing business intelligence to developers, investors, and policymakers.