Home sales in Tier-1 cities are twice as high as in Tier-2 cities: PropEquity

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

The sale of residential real estate in Tier 1 cities in the country exceeded 250% of levels seen in Tier 2 cities in 2022. Total absorption in Tier 1 cities was 4.53 lakh units as compared to 1.83 lakh units in Tier-2 cities, according to a report by real estate consultancy, PropEquity.

Even in terms of new residential launches, Tier 1 cities outperformed Tier 2 cities by more than 240% in 2022. Subway new launches amounted to 3.71 lakh units while in the last 1.52 lakh units was.

“This disproportion in metros and tier 2 cities is due to employment, better infrastructure with better living standards in tier 1 cities. Irrespective of the size of the real estate sector in the two categories of cities, there are very positive developments and overall growth of the real estate market across the country, where more and more people are finding a home of their choice and within their budget. says Samir Jasuja, founder and MD of PropEquity.

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

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

Overall, 2022 saw a maximum home sales over the past eight years, with overall absorption increasing 28% year-on-year. These higher sales were the result of multiple factors, including greater consumer confidence in hard assets compared to post-Covid volatile assets, and lower repo rates of 4% in the first half of the year.

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