Real Estate Sector Anticipates Growth-Oriented Measures in Upcoming Union Budget 2026
The Indian real estate industry is expressing strong optimism as the Union Budget 2026 approaches, with sector leaders highlighting specific expectations that could significantly boost housing-led economic growth. According to Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO, Maharashtra, the budget presents a crucial opportunity to reinforce India's position as one of the world's fastest-growing major economies through strategic real estate interventions.
Key Expectations from the Real Estate Sector
As the government balances fiscal prudence with growth imperatives, the real estate sector is looking for measures that sustain investment momentum while improving affordability for homebuyers. Yagnik emphasizes that key expectations include:
- Tax rationalization for homebuyers to reduce financial burdens and encourage property purchases
- Higher allocations toward urban infrastructure development to support growing cities
- Policy support that improves liquidity and enables long-term capital formation within the sector
Yagnik further notes that a focused push toward affordable and mid-income housing could create a strong multiplier effect across employment, consumption, and allied industries, generating widespread economic benefits.
Potential Impact of Tax Relief Measures
Speculations suggest possible tax relief for homebuyers under the new income tax regime, which could act as a meaningful demand catalyst for the housing sector. Home ownership represents a long-term financial commitment, and even incremental relief on interest or principal repayment could significantly enhance affordability for potential buyers.
Such measures would particularly benefit first-time buyers and salaried households, encouraging those who have been hesitant to enter the market. This could translate into stronger absorption across residential segments and reinforce the ongoing shift toward end-user-driven demand rather than speculative investment.
Redefining Affordable Housing Parameters
There is a growing consensus within the industry that the government should revisit the definition of affordable housing, especially in large urban centers. The current price and size thresholds, while appropriate when introduced, no longer reflect market realities due to rising land prices, construction costs, and compliance requirements.
Industry experts suggest updating the cap to approximately ₹80–90 lakh and allowing slightly larger unit sizes to better reflect contemporary urban living needs. This revision is not about promoting luxury housing but about making well-designed, family-sized homes accessible within city limits. A revised framework could expand the pipeline of viable projects and unlock both supply and genuine end-user demand in the mid-income segment.
Medium to Long-Term Market Outlook
The medium- to long-term outlook for India's real estate market remains positive despite global uncertainties. Structural drivers such as urbanization, infrastructure expansion, rising incomes, and evolving lifestyle preferences continue to underpin demand across residential and commercial segments.
While interest rate cycles and global economic factors may lead to short-term fluctuations, residential demand driven by end users has shown remarkable resilience. Policy continuity, improving transparency, and sustained economic growth are likely to support steady momentum across key markets in the coming years.
Addressing Sector Challenges
The real estate sector continues to face several challenges that require government attention and intervention. Key issues include elevated input costs, extended approval timelines, and limited access to affordable financing, particularly for mid-sized developers who play a crucial role in the housing ecosystem.
Streamlining approvals through digitization, improving credit availability through specialized financing mechanisms, and ensuring regulatory clarity can significantly address these constraints. Continued focus on ease of doing business and predictable policy frameworks will help improve efficiency, reduce project delays, and strengthen overall sector confidence among investors and homebuyers alike.
The Growing Importance of Green Living
Green living is increasingly becoming central to real estate planning and development across India. Homebuyers today are placing greater value on healthier living environments that offer open spaces, better air quality, ample natural light, and greener surroundings that support both physical and mental well-being.
This consumer shift is encouraging developers to create people-centric communities rather than merely constructing buildings. As green living moves from being an added feature to a core planning principle, it is helping the industry deliver long-term livability and lasting value, making this environmental consciousness a positive structural shift for the entire real estate sector.
The Union Budget 2026 represents a significant opportunity for the government to address these various aspects through targeted policy measures that could unlock the full potential of India's real estate sector while contributing to broader economic growth objectives.
