Union Budget 2026 Highlights Shift in India's Real Estate Landscape
The Union Budget 2026, presented on Sunday, has brought into sharp focus the evolving trajectory of India's real estate sector. While Mumbai and Delhi continue to dominate headlines with ultra-luxury transactions exceeding Rs 100 crore, comprehensive industry data reveals a significant and gradual shift in growth patterns beyond the country's largest metropolitan markets.
Emerging Cities Outperform Traditional Metro Hubs
Recent analysis indicates that the highest average returns on property investments are increasingly originating from cities outside India's conventional metro hubs. Bhubaneswar has emerged as the top-performing city in terms of long-term residential price appreciation, surpassing many established metropolitan centers. Other markets demonstrating robust performance include Gurgaon, Navi Mumbai, and Greater Noida, collectively illustrating a broader redistribution of investor returns away from traditional urban cores.
Detailed Performance Data Across Timeframes
According to data from the National Housing Bank's RESIDEX covering September 2015 to September 2025, real estate returns over a ten-year period clearly favor non-metro and emerging cities. Bhubaneswar recorded the highest returns at 148.3 percent, closely followed by Ahmedabad at 147.3 percent and Gandhinagar at 145.6 percent. Among metro-linked markets, Gurgaon and Greater Noida posted returns of 131.2 percent and 125.2 percent respectively, while Bengaluru remained below the 100 percent threshold during the same period.
The five-year data further reinforces this trend, with Gurgaon reporting returns of 94.1 percent, followed by Greater Noida at 76.1 percent and Bhubaneswar at 57.7 percent. Additional cities such as Noida, Chhattisgarh's tri-city region, and Ghaziabad also recorded substantial gains within this timeframe.
Shorter-term trends broadly mirror this pattern. In the three-year window, Gurgaon and Greater Noida dominated with returns of 94.1 percent and 76.1 percent respectively, while Bhubaneswar maintained consistent performance. One-year returns exhibited a similar bias, with Gurgaon leading at 25.9 percent, followed by Navi Mumbai and Greater Noida with returns of 23.9 percent and 23 percent respectively. Bengaluru recorded a return of 11.3 percent, trailing several smaller and peripheral markets.
Mixed Industry Response to Budget 2026
The real estate sector's response to the Union Budget for FY 2026-27 has been mixed. While developers and analysts welcomed the government's sustained focus on infrastructure development, industry bodies expressed significant disappointment over the absence of targeted policy support for the affordable housing segment.
The Confederation of Real Estate Developers' Associations of India (CREDAI), representing nearly 15,000 developers nationwide, highlighted that the lack of incentives for affordable housing could further diminish its share in the overall housing market. CREDAI National President Shekhar Patel stated, "Deeply disappointed that the Budget offers nothing concrete for affordable housing." He emphasized that rising construction costs and escalating land prices, without corresponding policy interventions, are rendering affordable housing projects increasingly unviable for developers.
Despite these concerns, CREDAI acknowledged and welcomed the government's continued thrust on infrastructure creation. The association noted that investments in highways, metro rail projects, logistics corridors, railways, and urban infrastructure would enhance connectivity and unlock new growth corridors.
Expert Insights and Sector Outlook
Financial services firm Jeffries provided an overall sector outlook, noting, "The real estate sector stands to benefit from tax incentives for data centres and relaxed safe harbour norms for global capability centres (GCCs), which should support office demand and REITs. However, a rise in bond yields could weigh on sector valuations."
Navin Dhanuka, Director at ArisUnitern, commented, "The emphasis on infrastructure, City Economic Regions, and industrial corridors creates a virtuous loop between jobs, housing, and urban expansion. By widening the geographical footprint of cities, the Budget enables housing growth beyond saturated urban cores into well-connected peripheral and Tier-2 markets."
Bhavesh Kothari, Founder & CEO of Property First Realty, expressed optimism, stating, "A committed Rs 5,000 crore annual allocation for City Economic Regions and continued emphasis on Tier-2 and Tier-3 cities are likely to reshape development patterns, easing pressure on metros and unlocking housing demand in new corridors."
Aman Sharma, Founder and Managing Director of Aarize Group, added, "The Union Budget 2026 sends a strong, reassuring signal to the real estate and infrastructure ecosystem. The focused allocation for Tier-2 markets recognises where India's next major real estate opportunity will take shape." He further noted that the introduction of the Infrastructure Risk Guarantee Fund would facilitate long-term capital access and reduce execution risks for large-scale projects, while sustained infrastructure focus would improve connectivity and foster a virtuous cycle for housing, industry, and employment, thereby restoring developer confidence for sustainable growth planning and investment.
