Pune's Real Estate Market Achieves Record Highs in 2024. What’s the forecast for property sales in 2025?

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Pune's real estate sector experienced a landmark year in 2024,

with both commercial and residential markets achieving record-breaking figures. According to Knight Frank India's latest report, "India Real Estate: Office and Residential (July - December 2024)," the city's office market recorded a total leasing activity of 8 million square feet, reflecting a 19% year-on-year (YoY) growth—the highest ever for Pune. This impressive performance was driven by a robust first half, with steady demand maintaining momentum in the second half, despite some recalibrations. Leasing activity during H2 2024 stood at 3.6 million square feet. Office rentals increased by 5% YoY during 2024, rising to ₹77 per square foot per month from ₹73.5 per square foot per month in 2023.

The surge in demand was primarily driven by the flexible workspace (flex) sector, which accounted for 35% of the total office space transactions, totaling 2.8 million square feet—a staggering 112% YoY growth from 1.3 million square feet in 2023. This was followed by India-facing businesses, capturing 31% of the area transacted at 2.5 million square feet, marking a 41% increase from the previous year. Additionally, Pune experienced a consistent rise in Global Capability Centers (GCCs), particularly in SBD East and Kharadi, driven by its skilled talent pool and cost benefits. In 2024, GCCs represented 19% of the total transaction share.

The residential market mirrored this growth, achieving a record high of 52,346 units sold in 2024, reflecting a 6% YoY increase. The weighted average price of residential units rose by 6% YoY, reaching ₹4,778 per square foot. The mid-range segment, with ticket sizes between ₹5 million and ₹10 million, dominated the market, contributing 45% of total sales with 23,798 units sold. Notably, the luxury housing segment, with ticket sizes ranging from ₹20 million to ₹50 million, experienced a 68% YoY growth, rising from 1,289 units in 2023 to 2,166 units in 2024.

Pune's inventory levels rose by 18% YoY in 2024, primarily due to an increase in supply. Despite this growth, the Quarters to Sell (QTS) metric remained strong at 3.7 quarters, indicating faster absorption rates and robust buyer demand. The city witnessed an all-time high in new project launches, with a total of 59,548 units introduced—a 40% YoY increase, the highest growth among eight major Indian cities. Launches in H2 2024 also reached an all-time high, with 31,501 units being launched in the second half of the year, marking a 49% YoY increase from 21,203 units in H2 2023.

Several factors contributed to this unprecedented growth. The expanding startup ecosystem and the rising adoption of hybrid work models fueled the demand for flex spaces. Simultaneously, ongoing infrastructure developments, such as the Metro Corridor and expanded road networks, enhanced connectivity across the city, boosting buyer interest in emerging residential areas. The city's skilled talent pool and cost advantages attracted GCCs, further driving demand in both commercial and residential sectors.

Looking ahead, experts remain optimistic about Pune's real estate market. P. Vilas, National Director - Occupier Services, Capital Markets and Branch Head - Pune at Knight Frank India, stated, "Pune's office market continues to thrive by adapting to evolving occupier needs. With increasing focus on flexible workspaces, hybrid models, and sustainability, the city is well-positioned to tackle future challenges. Infrastructure improvements, coupled with sustained demand from sectors like BFSI, and IT/ITeS, are projected to fuel further growth in 2025, solidifying Pune's position as one of India's most dynamic and resilient office markets."

In conclusion,

Pune's real estate market in 2024 demonstrated remarkable resilience and adaptability, achieving historic highs in both office leasing and residential sales. The city's ability to cater to evolving occupier needs, coupled with ongoing infrastructure developments and a robust economic environment, positions it favorably for sustained growth in the coming years. As developers and investors continue to capitalize on these trends, Pune is set to reinforce its status as a leading destination in India's real estate landscape.