New Delhi, June 15, 2025 — The supply of affordable housing in India’s mid-tier urban centers dropped precipitously in the first quarter (January–March 2025). PropEquity’s latest data reveals a staggering 54% decline in new launches of budget homes—those priced below ₹50 lakh—in 15 major Tier‑2 cities.
Key Figures & Trends
Overall Launch Volume
Total new units fell by 35% year-on-year, dropping from 45,901 units in Q1 2024 to 30,155 units in Q1 2025.
Affordable Segment Breakdown
Units priced under ₹50 lakh dropped from 15,420 to 7,124, reducing the segment’s share from 33% to 24%. In state capitals such as Lucknow, Jaipur, Bhopal, and Bengaluru outskirts, the affordable segment saw declines of up to 90%.
Mid‑ and Premium‑Range Housing Growth
Homes priced between ₹50 lakh and ₹1 crore declined 12% in volume, yet their share increased to 48% of total launches. Units priced between ₹1–2 crore grew by 17%, increasing their supply share from 18% to 23%.
In contrast, ultra‑premium homes priced above ₹2 crore dropped sharply by 73%, decreasing from 13% to just 5% of new launches.
Regional and City‑Level Insights
Eastern and Central regions experienced the largest declines at 68% and 66%, respectively. Northern India followed with a 55% drop, while Western and Southern regions saw more moderate dips at 28% and 26%.
Bhubaneswar registered the sharpest city-level decline with a 72% fall to just 772 units.
Nashik remained relatively stable with only a 2% decrease, maintaining a supply of 2,466 units.
Coimbatore stood out with a 127% surge in new launches, rising from 475 to 1,077 units.
What’s Driving the Shift?
According to PropEquity CEO Samir Jasuja, the downturn in affordable launches is due to a strategic pivot by financially strong developers, who are focusing on higher-margin mid-income and premium projects to sustain profitability.
With the Reserve Bank of India reducing the repo rate by 50 basis points and home loan rates settling around 8–8.5%, demand for mid-segment homes is expected to remain robust, even as affordable supply shrinks.
Implications for Stakeholders
- Affordability concerns: Lower- and middle-income buyers in Tier‑2 cities are seeing fewer options in the sub-₹50 lakh range.
- Market segmentation: City-specific trends like growth in Coimbatore and resilience in Nashik highlight the need for localised strategies.
- Policy and planning: Despite developer preferences, government and infrastructure investments may still encourage broader housing demand across income segments.
Bottom Line
Q1 2025 signals a significant shift in India’s Tier‑2 housing market. While developers focus on mid- and premium-tier homes for better margins, the affordable segment is increasingly sidelined. Interest rate reductions and infrastructure improvements may support continued demand, but the gap in low-cost housing availability could pose long-term challenges.
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