Municipal Elections and Union Budget: Shaping the Future of Pune Real Estate

The municipal elections for the Pune and Pimpri-Chinchwad Municipal (PCMC) governments are more than just a local political event. They are pivotal for the infrastructure, housing costs, and overall livability of two cities that have become major hubs for jobs and a better quality of life for millions of Indians. Simultaneously, with the Union Budget just weeks away, the real estate industry is eagerly awaiting potential policy changes that could significantly impact the sector.

These elections and the budget could make or break the real estate industry in the coming years. The decisions made at both the local and national levels will have long-term effects on how people live, work, and plan their futures in Pune and PCMC.

Worsening Infrastructure Deadlock

Pune and PCMC are rapidly growing cities, but the benefits of this growth are not distributed equally. While new office towers and luxury developments are sprouting up, many areas still struggle with basic public services that are taken for granted in other cities.

Take Hinjawadi in PCMC, for example. Previously outside PCMC and administered by multiple authorities, Hinjawadi faced severe infrastructure issues despite being a major IT hub. In 2025, the Maharashtra government merged Hinjawadi and nearby villages into PCMC to streamline governance. The expectation was that this would improve civic services, administration, and infrastructure for residents and businesses. However, Hinjawadi continues to face significant waterlogging issues. The Pune Metropolitan Region Development Authority (PMRDA) has identified multiple instances of unauthorized construction blocking natural water channels, causing rainwater to accumulate along the metro route and in nearby residential areas. This is not just an inconvenience; it is a safety hazard that lowers property values and makes daily life difficult.

Other areas, such as Kalas-Dhanori-Lohegaon, Yerawada-Gandhinagar, and the newly merged areas like Keshavnagar-Manjari and Undri, suffer from terrible traffic jams, narrow roads, inadequate drainage systems, and severe water shortages. Many residents rely on water tankers, which can be expensive and unreliable. Flood line restrictions have also halted the redevelopment of old housing societies, leaving large plots of land set aside for schools, hospitals, and sports fields underutilized.

What the Data Shows About Supply and Demand

There is a significant disparity between what the real estate industry is building and what regular Indians need. According to ANAROCK’s most recent study, affordable housing (units priced below Rs 40 lakh) accounted for only 18% of housing sales in India’s top seven cities in the first half of 2025, down from 37% in 2021. This is a concerning trend.

In Pune, overall sales volumes are strong, having grown by 56% in the past five years. However, the mix of homes sold has shifted dramatically. The number of premium homes priced above Rs 1 crore has increased fivefold, while it is becoming increasingly difficult to find homes priced below Rs 45 lakh. Developers have moved their focus to higher-end segments to maximize profits, but this has exacerbated the uneven sales mix. The lack of affordable housing is a significant policy failure, with the supply-to-demand ratio for affordable homes dropping from 1.05 in 2019 to just 0.36 in June 2025. This means that for every affordable home available, there are nearly three people looking to buy one.

The Role of Civic Leadership – More Important Than You Think

The authorities elected or appointed to PMC and PCMC have considerable power to accelerate or delay infrastructure projects. They are responsible for obtaining approvals, setting budgets, acquiring land, and coordinating between departments. The difference between fixing a waterlogging problem in one monsoon and letting it persist for ten years often comes down to the presence of real political will and administrative competence.

For instance, the Katraj-Kondhwa road widening project, approved in 2018, was delayed for years due to slow land acquisition. It was only recently that PMC provided funds to move the project forward. Without committed leadership at the local level, such decisive action is unlikely. Similarly, the Old Mumbai-Pune Highway project, which includes road work, the installation of large water pipelines to address PCMC’s water shortage, and the construction of the metro, requires detailed planning and coordination. The success of these projects depends on corporators who understand the interconnectedness of water, traffic, and real estate development and are willing to push for timely completion.

What the Union Budget Can Change

As the country prepares for the February 1 Union Budget, the real estate industry is advocating for immediate policy action to address the affordable housing crisis.

The current limit for what qualifies as ‘affordable housing’ is Rs 45 lakh, a threshold that has not been adjusted despite the astronomical rise in land and construction costs in Tier 1 and Tier 2 cities like Pune. Badal Yagnik, CEO of Colliers India, rightly points out that “standardizing and updating the criteria for affordable housing to reflect real prices in Tier I cities can boost demand for residential real estate.”

The industry is calling for several specific actions in Budget 2026: - Better tax breaks for homebuyers : Raising the interest deduction limit under Section 24(b) from Rs 2 lakh to Rs 5 lakh a year. - Interest subsidies for first-time buyers : Direct interest subsidies to help potential property buyers who do not qualify for current PMAY programs. - Broadened definition of affordability : Raising the limit on affordable housing to Rs 75 lakh or even Rs 80 lakh in major cities. - Urban infrastructure investment : Major allocations for improving water systems, roads, drainage, and public transport to manage increasing populations and maintain livability. - Streamlined approvals : Reducing the GST on under-construction homes and implementing a Single Window Clearance System to expedite project approvals.

How Everything Fits Together

City infrastructure projects and national housing policies are not mutually exclusive; they must coexist. If PMC and PCMC corporators push for timely completion of infrastructure improvements like better roads, proper drainage, reliable water supply, and coordinated metro connections, the cities become more livable. These factors attract homebuyers and businesses, raising property values.

However, if the Union Budget fails to make affordable housing more accessible or provide tax breaks for middle-class buyers, property values may become unaffordable for most Indians. Conversely, if the budget makes affordable housing more attainable but local projects lag due to poor planning and infrastructure issues, new housing will not be livable. This can lead to a stagnated market and decreased investment in the area.

You Are Very Much Involved

For millions of residents in Pune, these are pressing issues. A young engineer earning Rs 60,000 a month is trying to determine if they can afford a home in a PMC or PCMC area. They are considering factors such as the neighborhood’s water supply, road conditions, and property value stability. If interest deduction limits do not increase, they may struggle to afford the EMI.

Investors looking at Pune as a long-term investment are also watching which wards or areas are receiving infrastructure attention from newly elected corporators. They are assessing where the metro will improve connectivity and which projects, like road widening in Katraj-Kondhwa or the construction of water pipelines in PCMC, will enhance property values.

For developers, the questions revolve around the speed of approvals, the official definition of ‘affordable housing,’ and the potential to streamline the construction process with government support. These elections and budget decisions can significantly impact all these stakeholders.

The Next Step

When you vote, don’t just listen to what candidates say. Investigate their track record and commitment to infrastructure and affordable housing. Engage with local communities and stay informed about the policies and projects that will shape the future of Pune and PCMC. Your vote and your voice can make a difference in creating a more livable and equitable city.