2024 Real Estate Boom in Tier-2, Tier-3 Cities

Published Date : 25/02/2025 

Housing prices in India's top eight markets saw a 10% year-on-year rise in Q4 2024, with Delhi NCR and Bengaluru leading the growth. The CREDAI – Colliers - Liases Foras report highlights the sustained price appreciation and declining unsold inventory. 

2024 witnessed a significant real estate boom, particularly in Tier-2 and Tier-3 cities across India.

The average housing prices across the top eight markets saw a 10% year-on-year (YoY) increase during the last quarter of 2024, according to a joint report by CREDAI – Colliers - Liases Foras.

This marks the 16th consecutive quarter of rising prices, starting from 2021, indicating a sustained trend of price appreciation in all eight major cities.

Delhi NCR led the surge with a 31% YoY growth, followed by Bengaluru with a 23% increase in Q4 2024.

These increases reflect a robust market driven by various factors, including evolving consumer preferences and government initiatives.

Badal Yagnik, Chief Executive Officer at Colliers India, noted that the average residential prices could see similar increases in 2025.

“The recent repo rate reduction, along with government initiatives to fund stressed residential projects, will provide a boost to the affordable housing segment,” Yagnik explained.

“Going forward, with room for further reductions in benchmark lending rates, most cities are likely to witness increased housing sales across categories.”

Among the other cities, Ahmedabad saw a 15% rise, Pune a 9% increase, Chennai a 6% hike, the Mumbai Metropolitan Region (MMR) a 3% rise, Hyderabad a 2% increase, and a minor 1% rise in Kolkata.

Within Delhi NCR, the Dwarka Expressway witnessed the highest annual price rise at 58%, while Greater Noida saw a commendable 52% YoY growth.

Prominent micro-markets such as Periphery & Outer West in Bengaluru and Baner & Nagar Road in Pune also saw significant traction in ready-to-move-in units.

Boman Irani, President of CREDAI National, highlighted the strong confidence among homebuyers, which is driven by a preference for spacious living and lifestyle upgrades.

“While evolving preferences and lifestyle upgrades remain key motivators, cost pressures in construction and land acquisition are also significantly contributing to pricing trends.

As we look ahead, a potential reduction in interest rates could further boost affordability and drive even greater demand,” Irani added.

The report also noted a continued decline in unsold inventory for the fourth consecutive quarter, dropping 5% annually during Q4 2024.

By the end of December 2024, the unsold inventory at the India level stood below 10 lakh housing units for the first time in the last two years.

MMR, with a 40% share, continued to account for a majority of the unsold inventory.

Notably, Pune saw the highest annual drop in unsold inventory at 14%, closely followed by Hyderabad with a 13% decline.

This data underscores the robust growth and positive sentiment in the real estate sector, indicating a promising outlook for the year ahead.

Government policies and favorable economic conditions are expected to further catalyze this trend, making 2025 a critical year for the real estate industry in India. 

Frequently Asked Questions (FAQS):

Q: What was the overall YoY increase in housing prices in the top eight markets in Q4 2024?

A: The average housing prices across the top eight markets in India saw a 10% year-on-year (YoY) rise during the last quarter of 2024.

Q: Which city saw the highest rise in housing prices?

A: Delhi NCR witnessed the highest rise at 31% YoY growth in Q4 2024.

Q: What factors are driving the increase in housing prices?

A: The increase in housing prices is driven by evolving consumer preferences, lifestyle upgrades, cost pressures in construction, and government initiatives to fund stressed residential projects.

Q: How has the unsold inventory changed in the last quarter of 2024?

A: The unsold inventory continued to decline for the fourth consecutive quarter and dropped 5% annually during Q4 2024, backed by healthy demand.

Q: Which city saw the highest annual drop in unsold inventory?

A: Pune saw the highest annual drop in unsold inventory at 14%, followed by Hyderabad with a 13% decline. 

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