Decline in New Housing Supply in India's Tier-II Cities Signals Developer Strategy Shift

India's tier-II cities recorded a notable 35% decrease in new housing supply, dropping to 30,155 units in the first quarter of 2025, according to a report by PropEquity.

This decline, attributed to developers recalibrating their strategies and focusing on premium homes, signals a shift in the real estate market dynamics. Financially strong developers are targeting higher profit margins by launching upscale projects.

Key cities like Ahmedabad, Surat, and Jaipur witnessed significant downturns, with Ahmedabad's supply plummeting from 17,108 units to 11,096 units. Coimbatore, however, saw an increase in new supply, indicating variability within the sector. Despite the reductions, experts suggest the market remains robust, with potential for innovation and growth.

(With inputs from agencies.)