Pune’s Residential Market Faces a Paradox: Falling Sales Despite Rate Cuts
In a surprising twist, Pune’s residential real estate market saw an 8% annual decline in home sales despite interest rates dropping a trend linked to rising prices and affordability issues. Sales dropped from 93,737 units in June 2024 to 86,666 units in June 2025, even as average prices went up 7.3% YoY. This disconnect shows a growing mismatch between developer pricing and buyer expectations.
Affordability Challenges Slowing Sales
Affordability has hit a critical point, especially for smaller flats (under ₹1,200 sq. ft.). Buyers face high price tags. Rohit Gera, MD of Gera Developments, says, 'It’s like finding shampoo priced at ₹1,200 you just walk away.'
Main Reasons for the Decline:
- Prices Rising Faster Than Salaries: Average home prices rose 7.3%, making it harder for buyers to afford homes.
- Smaller Units Hit Hard: Mass and upper-mid segments see the most demand drop, with high prices deterring purchases.
- Cautious Market Sentiment: Developers are adjusting their strategies to stay competitive in a price-sensitive market.
New Launches See a Steep Drop
Developers are adjusting their product strategies after new launches fell 10.3% over the past year from 99,166 units to 88,941 units. This drop shows a still that is not affordable to buyers.
Contrasting Trends: Quarterly Weakness vs Annual Resilience
While May 2025 saw property registrations drop 3% YoY to 11,930 units (after a post-March correction), the first five months still showed strong growth with:
- 99,339 registrations (up 16% YoY)
- ₹2,457 crore stamp duty collections (up 20% YoY)
| Metric | Jan-May 2024 | Jan-May 2025 | Growth |
|---|---|---|---|
| Registrations | 85,561 | 99,339 | +16.1% |
| Stamp Duty (₹ Cr) | 2,049 | 2,457 | +20.0% |
Source: Property Registrations Data
Expert Insights: Path Forward for Developers
Industry leaders warn against complacency despite the first half’s strength: ‘Office leasing is at all-time highs, signaling job growth that could revive H2 sales,’ notes Bharat Agarwal, Naredco Pune President.
Strategies to Tackle Affordability:
- Reorient Products: Focus on compact configurations and pricing-as-a-feature models.
- Maintain Pricing Discipline: Set launch prices to match the risks of prolonged market stagnation.
- Leverage Commercial Synergies: New job opportunities are created through booming office spaces to drive future demand.
Conclusion: A Market in Transition
Pune’s real estate scene shows strong underlying demand clashing with affordability issues. While short-term corrections continue, developers adapting to realistic pricing could benefit from second-half momentum. Balancing aspirational pricing with affordability insights is key a challenge seen across India’s top metros.