Pune's residential market: beyond a retirement haven

Uncovering potential growth drivers of the booming residential sector in Pune.

May 31, 2024

Pune’s residential market has experienced remarkable growth in recent years, with the number of launches and sales not only recovering from the Covid-induced slowdown but also reaching an all-time high. In 2022, there was a significant surge of 110% in new project launches, and primary sales also saw a year-on-year increase of 65%. This trend continued in 2023, with a 32% growth in new launches and a 47% increase in primary sales compared to the previous year. In the last few quarters, Pune has ranked among the top 2 performing residential markets among India's top seven cities, coming second only to Mumbai.

Figure 1: Pune – New launches, sales and capital value

Source: JLL Research, 2Q24

The growth in Pune’s residential sector can be attributed to a number of favourable factors, including:

  1. Growing office sector: Pune's reputation as the "Oxford of the East" has attracted a diverse range of multinational companies (MNCs) from various sectors such as IT, banking, and manufacturing. This has led to the establishment of office clusters in locations like Kharadi, Viman Nagar, Yerawada, Hadapsar, Hinjewadi, and Balewadi. The presence of these companies has created a strong demand for residential properties among corporate employees, driving the growth of the residential sector.

  2. Industrial sector: Pune is an established industrial hub, hosting prominent foreign and domestic manufacturers in the automobile, automobile ancillary, and electronics sectors. The residential demand from employees working in these industries has contributed to the development of fringe areas in the northwest and northeast regions of Pune.

  3. Livability: Pune has been recognise d as the second most livable city in India after Bengaluru, as per the Ease of Living Index in 2024. The city offers a good quality of life, which has attracted residents and contributed to the growth of the residential market.

  4. Affordability: Despite being one of the fastest-growing metro cities, Pune remains one of the most affordable residential markets in the country, which has made it an attractive destination for homebuyers.

  5. Urban infrastructure upgrades: Pune is currently undergoing significant infrastructure advancements such as the development of Pune Metro Lines and the construction of the Pune Outer Ring Road. These projects aim to enhance intra-city connectivity, decongest traffic and thus provide a significant boost to residential development in Pune.

Figure 2: Factors favouring residential growth in Pune

Source: JLL Research, 2Q24

Pune, once renowned for its low to mid-rise housing and bungalow developments, has now transformed into a thriving housing market dominated by mass housing and township projects. Several emerging housing markets in the city include:

  • Baner-Balewadi: This area has transitioned from being a mid-segment housing market to an upper-mid and premium segment housing market. Locations such as Balewadi Highstreet and Pan Card Club Road have emerged as premium housing destinations.

  • Wakad-Ravet: This newly emerging residential cluster has experienced exponential growth in both demand and supply since 2022, making it a promising area for real estate development.

  • Mundhwa-Kharadi: Currently dominated by mid and upper-mid-segment housing, this region is gradually evolving into a premium-segment housing market.

Pune has officially become the city with the largest geographical area in the state of Maharashtra. It is a city poised for substantial real estate growth in both the short and long term. Its transformation from a retirement haven to the fastest-growing metro is a testament to its potential and attractiveness for real estate investors and developers.