Infrastructure Challenges Impact Affordable Housing Demand in Pune

Pune: The dwindling supply of low-cost homes, coupled with accessibility issues to offices and essential facilities, is dampening demand for affordable housing in the city, industry players and residents said on Tuesday.

The affordable housing projects are typically located on the outskirts of the city, including areas like Wagholi, Phursungi, Katraj, Dhanori, Lohegaon, areas beyond Wakad and Balewadi, and as far as Urali Kanchan. These areas frequently face power outages, lack of water supply, and poor road conditions.

Nitin Deshpande, chairman of the Marathi Bandhkam Vyavsayik Association, pointed out that many affordable housing projects do not take off due to these issues. He suggested that the government should consider revising the definition of affordable housing and provide concessions to developers on income tax and stamp duty.

Affordable apartments are currently defined as those priced up to Rs 45 lakh or 968 sq ft. However, typical flats in the city are usually smaller, ranging from 400-450 sq ft, which suits nuclear families but not larger ones, according to residents. A recent survey by property consultant Anarock showed that most homebuyers were dissatisfied with the location of projects, flat sizes, and construction quality. According to the firm, the most affordable budget homes in the area start at around Rs 55 lakh.

A major issue in the affordable housing projects is the maintenance of buildings. Shalaka Kale, a resident of Wagholi, noted that occupants often do not keep up with maintenance payments, leading to dilapidated buildings. This impacts the resale value of the flats, making it difficult to find buyers.

Consultancy firm Knight Frank India, in a report, stated that the cost of land is quite high in urban areas. For affordable housing to be viable, the location must be cost-effective. However, acquiring such land parcels in central areas is economically unfeasible due to steep prices. As a result, developers are compelled to seek land on the peripheries of cities, where it is more affordable but typically disconnected from urban infrastructure.

Katraj resident Sarang Kumbhar shared that he spends close to two to three hours commuting between his workplace and home daily. He suggested that it would be better to shift to a central area in the city and that the Metro network should expand to peripheral areas to allow the middle class to travel to the city center.

According to the Gera Pune Residential Realty Report, the share of budget homes in the total housing market has been declining over the years. In H1 2020, budget homes accounted for 49% of the market, but this dropped to 29% in H1 2025. The budget category is defined as homes priced less than Rs 5,453 per sq ft, while the value category ranges from Rs 5,454 to 6,818 per sq ft, premium from Rs 6,817 to 8,180 per sq ft, premium-plus from Rs 8,181 to 10,224 per sq ft, and luxury homes are priced more than Rs 10,224 per sq ft.