GST Cuts and Festive Cheer Fuel Housing Boom in Tier-2 and Tier-3 Cities
India's housing market is experiencing a surge of optimism as the festive season approaches, bolstered by recent reductions in Goods and Services Tax (GST) on key construction materials. This article explores how these changes are benefiting both developers and homebuyers, particularly in non-metro markets.
Gst CutsHousing MarketFestive SeasonTier2 CitiesTier3 CitiesReal Estate NewsOct 16, 2025
The period from Navratri to Diwali traditionally sees heightened home-buying sentiment across the country. Industry experts suggest that the combination of reduced GST rates and festive enthusiasm is set to accelerate housing demand. With lower input costs, potential buyers are expecting lower prices and showing greater confidence in making purchase decisions during this period.
Developers too are aligning their project launches, offers, and marketing campaigns with major festivals to tap this sentiment. Many are rolling out flexible payment schemes, early-bird discounts, and other incentives to attract homebuyers. The festive window is being viewed as a golden opportunity to convert inquiries into actual sales, especially in the non-metro markets.
Cities such as Lucknow, Indore, Raipur, Coimbatore, and Bhubaneswar are emerging as frontrunners in this recovery phase. In these markets, construction material costs constitute a higher portion of total project expenditure, meaning the GST cuts have a direct and positive impact on pricing and delivery margins.
'GST cuts on key construction materials have come at the perfect time, just ahead of the festive season, and this will significantly support affordability-driven markets,' said Prakhar Agrawal, Director, Rama Group. 'In Tier-2 and Tier-3 cities like Raipur and across Chhattisgarh, the reduction directly improves both pricing and delivery timelines. We are already seeing stronger inquiries from emerging cities as buyers look for value, trust, and timely possession.'
According to Adish Oswal, Chairman, Oswal Group, 'The recent reduction in GST on cement has provided a much-needed boost to the real estate sector ahead of the festive season. It enables developers to offer more competitive pricing across residential and commercial projects.' He added that in markets like Punjab, particularly Mohali and Ludhiana, improved infrastructure and festive enthusiasm are driving demand, making these regions key growth centres.
Umang Jindal, CEO, Homeland Group, said, 'A home is one of the most emotional purchases a family makes, and the festive season adds to this sentiment. Over the years, we've seen buyers amplifying their decisions between Navratri and Diwali, as the timing is seen as auspicious for new beginnings. As developers, we expect that the benefits are likely to be felt not just in metros but also in Tier-II and Tier-III cities, where the demand for luxury housing is surging exponentially. These cities are becoming the preferred choice for second homes, allowing buyers to access spacious, premium properties at a fraction of metro prices.'
Experts believe if developers effectively pass on GST savings and maintain delivery timelines, the period could mark the beginning of a sustained recovery in India's housing sector beyond the metros.
Frequently Asked Questions
What are the recent GST reductions on construction materials?
The recent GST reductions include lower rates on key construction materials such as cement, marble, granite, and bricks. These reductions are aimed at lowering construction costs and boosting the real estate sector.
How do these GST cuts benefit homebuyers?
The GST cuts on construction materials are expected to lower the overall cost of housing, making it more affordable for potential buyers. This, combined with the festive season, is likely to increase homebuying sentiment and activity.
Which cities are leading the housing market recovery?
Tier-2 and Tier-3 cities such as Lucknow, Indore, Raipur, Coimbatore, and Bhubaneswar are leading the recovery. These cities are seeing a significant increase in inquiries and sales due to the GST cuts and festive enthusiasm.
How are developers leveraging the festive season?
Developers are aligning their project launches, offers, and marketing campaigns with major festivals like Navratri and Diwali. They are rolling out flexible payment schemes, early-bird discounts, and other incentives to attract homebuyers during this period.
What is the expected impact on the housing market beyond the festive season?
If developers effectively pass on the GST savings and maintain delivery timelines, the period could mark the beginning of a sustained recovery in India's housing sector. This is particularly true for non-metro markets, where the demand for affordable and luxury housing is growing.
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