Tier-2 Housing Sales Fall 10 Per Cent In 2025

17 Feb 2026 CW Team

Affordability was affected by sustained home loan rates and a rise in input costs, which constrained buyer interest in certain localities. The pullback in demand coincided with an increase in unsold inventory in several cities, prompting some builders to delay launches. Sales incentives and flexible payment plans were introduced by developers to support transactions, but uptake remained limited in the most affected markets. Secondary sales and investor activity also softened, reducing immediate turnover.

Visakhapatnam experienced a slowdown linked to a cooling of local economic drivers, while Bhubaneswar and Vadodara saw muted household formation and delayed project completions that dented buyer confidence. Smaller tier-two centres showed varied performance, with local employment trends and infrastructure delivery shaping outcomes. Markets with a stronger affordable housing presence generally fared better than those dominated by higher price points. The pattern underscored a divergence between demand for affordable and premium offerings.

Industry participants said developers are likely to recalibrate supply and accelerate focus on affordable segments and pre-launch sales to restore momentum. Policy support, faster infrastructure delivery and an easing of financing costs would be important to revive activity in the near term. The sales dip is expected to prompt sharper market sorting, with stronger projects and locations retaining interest while weaker inventory faces longer cycles. Stakeholders will monitor upcoming quarter data to assess whether the downturn stabilises.

Sales of housing units across the top 15 tier-two cities fell by 10 per cent in 2025, according to industry data, with Visakhapatnam, Bhubaneswar and Vadodara among the hardest hit. The decline marked a notable slowdown from the previous year as transaction volumes weakened across multiple markets. Analysts attributed the fall to a combination of affordability pressures and slower demand growth. Developers reported a marked reduction in absorption rates, particularly for mid and premium segment projects. Affordability was affected by sustained home loan rates and a rise in input costs, which constrained buyer interest in certain localities. The pullback in demand coincided with an increase in unsold inventory in several cities, prompting some builders to delay launches. Sales incentives and flexible payment plans were introduced by developers to support transactions, but uptake remained limited in the most affected markets. Secondary sales and investor activity also softened, reducing immediate turnover. Visakhapatnam experienced a slowdown linked to a cooling of local economic drivers, while Bhubaneswar and Vadodara saw muted household formation and delayed project completions that dented buyer confidence. Smaller tier-two centres showed varied performance, with local employment trends and infrastructure delivery shaping outcomes. Markets with a stronger affordable housing presence generally fared better than those dominated by higher price points. The pattern underscored a divergence between demand for affordable and premium offerings. Industry participants said developers are likely to recalibrate supply and accelerate focus on affordable segments and pre-launch sales to restore momentum. Policy support, faster infrastructure delivery and an easing of financing costs would be important to revive activity in the near term. The sales dip is expected to prompt sharper market sorting, with stronger projects and locations retaining interest while weaker inventory faces longer cycles. Stakeholders will monitor upcoming quarter data to assess whether the downturn stabilises.

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