Tier-1 cities’ home sales is 2x of what it’s in tier-2 cities: PropEquity

• Total absorption witnessed in tier-1 cities was at 4.53 lakh units as against 1.83 lakh units in tier 2 cities in 2022.
  
• New launches in metros stood at 3.71 lakh units while it was 1.52 lakh units in tier-2 cities.
  
• 2022 witnessed the highest launches and absorption in the last eight years.
  

The sales of residential property in tier-1 cities in the country stood at more than 250% of the levels seen among tier-2 cities in 2022. The total absorption witnessed in tier-1 cities was at 4.53 lakh units as against 1.83 lakh units in tier-2 cities, according to a report by real estate consultancy, PropEquity.

Even in terms of new launches of residential property, tier 1 cities outperformed the tier 2 cities by more than 240% in 2022. The new launches seen in metros were at 3.71 lakh units while it was 1.52 lakh units in the latter.

“This disproportion in metros and tier 2 cities is due to employment opportunities, better infrastructure with better standard of living in tier 1 cities. Regardless of the size of the real estate industry in the two categories of cities, there are very positive developments and all round growth of the property market across the country where more and more people are finding a home of their choice and within their budgets,” says Samir Jasuja, founder and MD of PropEquity.

Interestingly, 2022 witnessed the highest launches and absorption in the last eight years. Absorption crossed 4.5 lakhs residential units with only 3.7 lakhs new supply added in the same period.

Inventory overhang is at all-time low with only 12 months of inventory left in top tier 1 cities in India. This gap in inventory will encourage developers to launch new projects in the coming quarters to cater to the existing demand.

In all, 2022 witnessed maximum residential property sales in the last eight years, with total absorption increasing by 28% year-on-year. These higher sales were a result of multiple factors such as increased confidence of consumers on hard assets compared to volatile assets post-Covid, and lower repo rates of 4% in the first half of the year.

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