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Gera Developments' latest Pune Residential Realty Report revealed an 8% decline in annual housing sales and a 10.3% drop in new launches. Despite a moderate 7.3% price increase year-on-year, average ticket sizes have surged by 76% over five years due to both rising prices and larger home sizes. Sales of smaller homes have fallen sharply while demand for spacious units continues to rise. Inventory levels have climbed to their highest since 2020, with affordability deteriorating to 6.52 times the average annual income, highlighting pressure on mid-segment buyers.
Gera Developments Private Limited, a prominent player in residential and commercial real estate with a presence in Pune, Goa, Bengaluru, and California, has released its July 2025 edition of the bi-annual Gera Pune Residential Realty Report. This long-standing, census-based study, which spans over 2,300 projects and more than 300,000 under-construction homes, offers a comprehensive view of market activity over the 12-month period ending June 2025. Advertisement
The report identified a slowdown in residential sales, with a decline of 8%-from 93,737 units to 86,666 units-marking a pause in Pune's consistent seven-year growth trajectory. The deceleration is being attributed to a growing phenomenon referred to as "sticker shock", caused by a 40% rise in housing prices and a 25% increase in average home sizes over five years. This has led to a 76% rise in the average ticket size of residential units, disproportionately impacting mid-income buyers.
The number of new residential launches has also fallen by 10.3%, with only 88,941 units introduced in the past year. This cautious developer response comes amid buyer hesitation and a more competitive market environment. Developers appear to be recalibrating both pricing and configurations, anticipating a return to smaller, more compact layouts to address affordability without reducing per-square-foot rates.
Rohit Gera, Managing Director of Gera Developments, observed that affordability has been eroded despite recent interest rate reductions, as buyers now face significantly higher outgoings. He said that this has prompted buyers to postpone decisions, contributing to a visible softening in demand. According to him, financially stable developers would have an edge in this evolving landscape, and the emphasis must shift to offering efficient, right-sized homes.
Divergence in buyer preferences has become evident, with demand for smaller homes under 1,200 sq ft dropping by 17%, while homes over 1,200 sq ft have witnessed a 13% increase in uptake. The affordability index has worsened significantly, moving from 4.38x to 6.52x of annual household income over the last five years. The current inventory overhang stands at 10.78 months-its highest since 2020-with 77,825 unsold units available in the market.
Structurally, the nature of residential projects is undergoing transformation. Large-scale projects exceeding 500 units have grown by 70% since 2018, while smaller projects with fewer than 100 units have shrunk by 39%. Pune now has 2,605 residential projects under development, marking a 6.7% annual increase. Price appreciation has varied by region, with East Pune recording the highest growth at 9.6%, followed by West Pune at 6.8%.
The report noted that new project prices have fallen by 4.73%, signalling some pricing restraint among developers even as broader market prices continue to rise. Locations like Hinjewadi, now linked via new Metro corridors, have experienced price stability while drawing interest from price-sensitive buyers.
Although the Reserve Bank of India's recent 50 basis point policy rate cut suggests a supportive monetary backdrop, the report indicates that market recovery remains tepid. However, upcoming infrastructure initiatives, including the city's Ring Road and expanded Metro connectivity, are expected to influence long-term development corridors.
The report suggests that developers must now align product offerings more precisely with changing buyer expectations. Compact designs, phased launches, and location-focused strategies are likely to become central to navigating this recalibrated market.
Larger homes continue to attract premium buyers, while compact, efficiently designed units may serve as the bridge back to affordability. With the dual pressures of inflationary costs and evolving buyer preferences, only those developers who can offer targeted, resilient products-backed by sound financials-are likely to maintain momentum in the city's recalibrating housing market.
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