The Union Budget 2026–27 reinforces the government’s urbanization push by prioritizing infrastructure development in tier-II and tier-III cities, expected to drive growth in the real estate sector alongside tier-I markets.
Experts believe this will diversify growth opportunities for real estate developers. However, the budget has left the affordable housing sector disappointed due to the absence of changes in the definition of affordable housing.
The industry had been hoping for a revision of the price cap, which currently stands at Rs. 45 lakh.
Key Highlights
They are seeking an increase to Rs. 80–90 lakh.One of the key announcements, the government’s flagship Pradhan Mantri Awas Yojana (PMAY) Urban 2.0, received a 5.9 percent reduction in allocation for the fiscal year, amounting to ₹18,625.05 crore, compared to ₹19,794 crore in 2025–26.
Despite the marginal decrease in funding, Credai welcomed the government’s focus on infrastructure but expressed deep disappointment over the lack of tangible measures for affordable housing.
Shekhar Patel, President of Credai, warned that without revising the outdated definition of affordable housing, its share in the market could further decline, from 18% to nearly 12% of total housing supply. This represents a setback for a sector that’s been urging reform for sustainable growth.
"This is a serious warning sign for India's lower middle class and middle class. CREDAI believes that affordable housing is not a welfare scheme - it is economic infrastructure. It is a major driver of employment, consumption, and social stability," Patel said.
“Rising construction costs and land prices, without corresponding policy support, are pushing developers away from this segment. If affordable housing supply continues to weaken, the consequences are clear: higher rentals, longer commutes, and growth of informal housing," Patel said.
Anurag Mathur, CEO, Savills India also pointed out that the twin needs of additional incentives for affordable housing and measures to increase disposable incomes remain areas for further policy attention.
Ramani Sastri - Chairman & MD, Sterling Developers said that the sector was expecting further measures to improve housing affordability, including expanded definitions for affordable housing, targeted incentives for first-time homebuyers.
Anuj Puri, chairman, ANAROCK Group said that from a real estate perspective, the Budget has delivered limited direct but various indirect benefits - acting more as a growth catalyst than an instant rescue cavalry.
Also Read: Affordable Housing Demand Drops Sharply in 2025
“One major disappointment for the real estate sector was that there were no major announcements for affordable housing, which has been in free fall since the pandemic. ANAROCK data indicates that the sales share of affordable housing plummeted after the pandemic - from over 38% in 2019 to 26% in 2022 to just around 18% in 2025,” he said.
Srinath Setty, CEO & Co-Founder, Hosachiguru: "The Union Budget 2026 strengthens the case for farmland to be viewed as a long-term sustainability asset, built on soil health, water security, and climate resilience. The higher allocation and the integrated development of 500 reservoirs are practical signals that water and land stewardship are moving up the national priority list.
Boman Irani, Chairman & Managing Director, Rustomjee Group: For managed farmland, these measures matter because they support outcomes that investors and landowners increasingly look for: stable productivity without soil depletion, crop diversity that reduces risk, and resilience against weather shocks. The continued push for natural farming aligns with regenerative practices that improve soil structure over time, while faster settlements under the crop insurance framework help protect the downside in extreme seasons. Put together, this policy direction supports a more responsible, future-ready approach to owning and managing farmland."
“Budget 2026 - 27 reflects continuity and fiscal maturity. Sustaining public capital expenditure at ₹12.2 lakh crore while maintaining a credible path of fiscal consolidation underscores policy stability - an important enabler for long gestation sectors like real estate.
The continued emphasis on infrastructure led development across transport corridors, urban mobility and economic clusters will gradually widen real estate demand beyond traditional metros. Improved connectivity and employment creation are essential for strengthening Tier 2 and Tier 3 cities as viable residential and commercial markets. The focus on sustainability, clean energy and climate-resilient infrastructure is also directionally encouraging. It reinforces the shift towards more efficient buildings, integrated urban planning and lower lifecycle costs, while aligning development with long-term climate goals.
However, the Budget is notably restrained on affordable housing. With the current definition no longer reflecting market realities, the segment’s share of total housing supply risks declining from around 18% to nearly 12%. Rising land and construction costs, without targeted policy support are making this segment increasingly difficult to sustain.
Affordable housing should be viewed not merely as a social imperative but as economic infrastructure - one that directly impacts employment, rental affordability, commuting patterns and urban stability. Addressing this gap, alongside faster approvals and execution-led reforms, would have made the Budget more balanced from a real estate standpoint.”
Samir Jasuja, founder and CEO, PropEquity: "The Budget’s emphasis on infrastructure-led growth, development of industrial corridors and manufacturing hubs, data centres, high speed rail corridors, dedicated freight corridor, recycling of significant real estate assets of CPSEs through dedicated REITs, Rs 5000 crore allocation per city economic regions (CER) over 5 years in tier 2&3 cities including temple towns are step towards amplifying the potential of these cities to deliver the economic growth. The consequent impact of this will propel the growth of real estate across categories and pave the way for comprehensive development of the Indian economy."
Lalit Parihar, Managing Director, Aaiji Group, a Dholera-based real estate firm: "The Budget’s strong thrust on infrastructure through industrial corridors, manufacturing hubs, high-speed rail and dedicated freight corridors creates a powerful foundation for long-term real estate demand. The proposed ₹5,000 crore allocation per City Economic Region over five years in Tier II and III cities, including temple towns, is a significant catalyst for planned urban expansion. These measures will directly translate into improved connectivity, stronger employment clusters and greater investor confidence, driving sustained growth across residential, commercial, retail and logistics segments. Collectively, these initiatives will help transform emerging cities into viable economic centres and position real estate as a key enabler of India’s broader economic development."
Rakesh Reddy, Director, Aparna Constructions: "The Union Budget for FY27 reinforces continuity and confidence in India’s infrastructure and construction story. By maintaining a strong thrust on capital expenditure, urban economic development, and logistics connectivity, the government has provided long-term visibility that is critical for construction companies planning capacity, investments, and execution pipelines. This consistency in infrastructure spending strengthens the foundation for both public projects and private sector development, creating a more predictable operating environment for the industry.
The focus on economic corridors, urban clusters, and connectivity-led growth is particularly encouraging, as it aligns infrastructure creation with broader economic activity. For construction players, this translates into improved project viability, better integration between infrastructure and real estate development, and stronger demand across residential, commercial, and industrial segments over the medium term. Proposals such as recycling CPSE real estate assets through dedicated REIT structures are a positive step towards unlocking dormant capital and improving land-use efficiency in urban centres, while creating additional headroom for infrastructure investment.
However, while the Budget clearly addresses the demand and investment side of the sector, the industry was also looking for more direct interventions around construction input costs, faster approval mechanisms, and policy clarity to stimulate urban housing demand. These remain critical challenges affecting project timelines and affordability, especially in high-growth urban markets.
As the government moves into the execution phase of its infrastructure agenda, complementary reforms focused on cost efficiency, approvals, and urban development policies could significantly accelerate delivery on the ground. Overall, the FY27 Budget reinforces a long-term growth narrative for the construction sector, with execution and policy fine-tuning now holding the key to unlocking its full potential."
Ashish Narain Agarwal, Founder & MD of PropertyPistol: "Union Budget 2026 reinforces real estate as a core investment pillar. The simplification of NRI property sale transactions is a structural reform that improves liquidity and accelerates cross-border capital inflows. A dedicated ₹5,000-crore push for Tier-2 and Tier-3 cities, supported by the newly introduced Risk Guarantee Fund, materially reduces execution risk and enhances investor confidence. With infrastructure capital expenditure rising to ₹12.2 lakh crore, city-economic regions are set to expand beyond metros, driving housing demand through improved connectivity, employment, and urban infrastructure. For real estate investors, this Budget shifts the narrative from speculative growth to policy-backed, data-driven returns. Emerging cities now offer a compelling mix of affordability, infrastructure momentum, and long-term appreciation making this the right cycle to invest with conviction."
Akshay Taneja, CEO, TDI Infrastructure: "Metro cities are witnessing saturation, with residential prices rising 25–30% over the last three years, alongside land scarcity, stretched infrastructure and longer approval cycles. In contrast, Tier-2 and Tier-3 cities now account for 44% of residential land acquisitions and are driving demand beyond metros. Housing sales across 60 cities crossed 6.8 lakh units in 2024, up 23% YoY, reflecting stronger affordability and connectivity. Digitalisation incentives and sustained infra spending will be critical for enabling safe, smart and scalable urban ecosystems across emerging city economic regions. Increase in infrastructure capex from ₹11.2 lakh crore to ₹12.2 lakh crore for FY27, combined with ₹500 crore in government support and the Infrastructure Risk Guarantee Fund, will materially improve project viability and private capital participation. However, it lays out a decisive blueprint for India’s next phase of urban growth."
Sunil Pandita, CDO, Nemetschek Group: "Budget 2026–27 sends a strong and timely signal towards building future-ready infrastructure for India. The government’s continued focus on public capital expenditure of ₹12.2 lakh crore, development of Tier 2 and Tier 3 cities, expansion of dedicated freight corridors, inland waterways, and creation of a robust infrastructure risk guarantee framework will significantly strengthen India’s infrastructure backbone."
"Equally encouraging is the emphasis on emerging technologies, particularly artificial intelligence, with large-scale capacity-building initiatives and national technology missions. As infrastructure networks expand in scale and complexity, digital engineering, AI-driven design, geospatial intelligence, and predictive modeling will be critical to enhancing safety, quality, resilience, and lifecycle performance of assets across highways, waterways, urban infrastructure, and logistics corridors. We see this Budget as an opportunity to accelerate the adoption of open, interoperable digital technologies across the construction and infrastructure ecosystem. By embedding digital-first design, planning, execution, and maintenance practices, India can deliver infrastructure that is not only faster and more cost-efficient, but also sustainable and resilient for decades to come. We look forward to supporting India’s infrastructure vision through technology-led innovation and global best practices."
Vishal Raheja, Founder & MD, InvestoXpert Advisors: "Union Budget 2026–27 articulates a more integrated real estate vision, where metro markets continue to anchor institutional stability while temple towns and pilgrimage corridors evolve as structured growth extensions. By scaling public capital expenditure to ₹12.2 lakh crore, the government is reinforcing infrastructure intensity across established cities and culturally significant destinations alike. Improved connectivity around temple towns will enable a transition from fragmented, seasonal development to planned hospitality districts, mixed-use assets, and organised residential catchments, while metros benefit from deeper liquidity through CPSE asset monetisation via dedicated REITs. The introduction of the Infrastructure Risk Guarantee Fund reflects a mature policy approach that recognises execution risk as a core constraint to quality development. Together, these measures position real estate as a long-term enabler of economic continuity, urban depth, and sustainable value creation across markets."
Saransh Trehan, Managing Director, Trehan Group: "Union Budget 2026 lays down a strong foundation for India’s real estate sector by significantly increasing infrastructure investment, with capital expenditure raised to ₹12.2 lakh crore for FY27,the highest ever which will drive connectivity and economic activity across urban and emerging markets. The emphasis on fast‑tracking REIT‑led asset recycling and support for Tier‑2 and Tier‑3 cities signals meaningful policy support to improve liquidity and investor confidence. Together with enhanced affordability measures and financing options, this Budget can catalyse demand and help the real estate industry sustainably contribute to job creation, urbanisation, and inclusive growth."
Sunil Sisodiya, Founder & CEO, Neworld Developers: "Budget 2026 is a major boost for India’s holiday home and tourism-linked real estate sector. With ₹12.2 lakh crore allocated to infrastructure, including high-speed rail, waterways, and eco-tourism corridors, connectivity to key leisure destinations will improve significantly. In Goa, a prime leisure and lifestyle destination, these initiatives are expected to enhance demand for holiday homes and resorts. Programs such as the National Institute of Hospitality, B12 hospitality classes, tourism courses with IIM collaboration, and the National Destination Digital Knowledge Grid will upskill over 10,000 professionals, integrating digital tools into hospitality education. Coupled with focus on India’s cultural, spiritual, and heritage sites, these measures will strengthen demand for lifestyle-driven real estate and reinforce India’s leadership in tourism and hospitality."
Manish Agarwal, Managing Director, Satya Group, President, CREDAI Haryana: “In the lead-up to Union Budget 2026, the real estate sector was looking for a combination of demand-side support, tax incentives, and reforms to ease project delivery and financing. While a few of these did not receive immediate focus, the Budget’s clear commitment to reform anchored in an infrastructure-led growth strategy, emphasis on Tier-1 and Tier-2 markets, and a reforms-over-rhetoric approach—offers a strong foundation for sustainable sector growth."
"At the same time, the industry continues to look forward to sharper policy support for affordable housing, particularly through rationalised transaction costs, improved access to finance, and measures that enhance viability for developers while preserving affordability for end users. Strengthening affordable housing remains critical for maintaining broad-based demand and urban inclusivity."
"The proposal to monetise and recycle CPSE-owned real estate reflects a pragmatic reform mindset by addressing the long-standing scarcity of well-located urban land. When aligned with investments in future-ready infrastructure and connectivity, these measures can ease supply constraints, encourage planned densification, and attract institutional capital. Over time, this can enable more balanced, efficient, and economically productive urban development across India, while positioning emerging cities as sustainable engines of real estate demand.”
Pradeep Aggarwal, Founder & Chairman, Signature Global (India): "The Union Budget 2026 provides a strong and credible roadmap for India’s next phase of growth, led by a sharp focus on infrastructure, urban development, and financial reforms. The government’s decision to raise public capital expenditure to ₹12.2 lakh crore in FY27, a 9% increase over FY26, will play a critical role in accelerating project execution and crowding in private investment. The creation of the Infrastructure Risk Guarantee Fund, along with the rollout of seven high-speed rail corridors and the operationalisation of 20 new national waterways over the next five years, will significantly enhance connectivity, reduce logistics costs, and improve the overall efficiency of the real estate and infrastructure ecosystem.
Urban development receives a sustained boost with an allocation of ₹5,000 crore per year for five years for City Economic Regions, alongside a continued focus on Tier-2 and Tier-3 cities as emerging growth centres. These measures will enable planned urbanisation, support civic infrastructure, and unlock housing demand across new geographies. Further, accelerated recycling of CPSE real estate assets through dedicated REITs and continued emphasis on InvITs will deepen capital markets, improve liquidity, and strengthen investor confidence across the sector.
On the consumption side, income tax reforms— including no tax liability up to ₹12 lakh under the new tax regime, rationalised TDS and TCS rates, and reduced TCS on overseas tour packages to 2%—will enhance disposable incomes and ease compliance, providing indirect yet meaningful support to housing demand. Overall, the Budget aligns strongly with the long-term vision of Viksit Bharat by 2047 and lays the foundation for sustainable, inclusive, and future-ready economic growth.”
Shivam Agarwal, VP - Strategic Growth, Sattva Group: "The Union Budget 2026 provides long-term clarity on how India’s cities will grow. Its emphasis on infrastructure-led development, stronger regional economic clusters and improved intercity connectivity creates a stable foundation for large-scale real estate planning across commercial, mixed-use and residential formats. The focus on GCCs in emerging cities and sustained support for digital infrastructure, including data centres, strengthens demand for high-quality office ecosystems beyond traditional metros. At the same time, better-funded urban infrastructure and city-level financing mechanisms improve the overall livability and resilience of growing cities. At Sattva Group, we see this Budget as reinforcing the importance of integrated development that is thoughtfully planned, digitally ready and built for long-term relevance.”
Adrija Agarwal, VP Business Development, Sattva Group: "The focus on infrastructure spending has a real ripple effect. Better connectivity improves ease of travel, enables more efficient sharing of resources, and leads to stronger utilisation across manufacturing and infrastructure. This helps accelerate consumption and creates a more balanced economy. The scale of the capex push reflects fiscal prudence and a long-term, structural approach to growth. The push to strengthen the service economy through supportive tax structures for data centres and Global Capability Centres will build growth momentum, accelerate value creation, and reinforce India’s position as a preferred destination for global enterprises.”
Ajay Kumar Dasarathy, COO - Residential, Sattva Group: "The Union Budget 2026–27 adopts a structural approach to real estate by prioritising urban infrastructure and capital formation over short-term demand incentives. In the absence of incremental buyer incentives, the emphasis naturally shifts to execution quality, cost discipline, and timely delivery. For residential developers, this underscores the importance of strong governance, predictable project execution, and pricing aligned with project fundamentals, delivery timelines, and long-term operating efficiency."
Ruchit Mehta, Partner, Mehta Realty: “From a real estate standpoint, Budget 2026 is neutral at best. Homebuyers were expecting meaningful relief, but the government has chosen to maintain status quo by rolling forward the same tax and policy norms from the previous budget. With residential sales already strong and personal finance remaining largely unchanged, the assumption appears to be that the sector no longer needs support. Any near-term boost will now depend purely on market sentiment, equity performance, and buyer confidence rather than policy intervention.”
Bhavesh Shah, Joint Managing Director, Today Group: “Budget 2026 reflects a sense of stability and confidence in India’s real estate market. The absence of disruptive policy changes provides continuity and clarity for both buyers and developers. While there were no direct affordability incentives, the sustained focus on infrastructure spending is a strong positive, as connectivity and urban development continue to shape housing demand. Going ahead, buyer confidence, interest-rate trends, and overall economic stability will play a larger role in driving the market. Developers who focus on timely delivery, quality, and trust will be well-positioned to benefit, particularly in infrastructure-led locations such as Navi Mumbai and Panvel.”
Hardik Pandit, Director of APICES Studio Pvt. Ltd: “While Budget 2026 didn’t deliver specific incentives for conventional real estate or homebuyers, it introduced a strategic long-term tax holiday for foreign cloud firms using Indian data centres — a policy designed to draw global digital infrastructure investments till 2047. From an architectural and urban planning standpoint, this represents a meaningful shift: designing resilient, energy-efficient, high-availability facilities will become a defining element of the built environment in cities like Mumbai. This isn’t just about floors and roofs — it’s about positioning Mumbai as a digital infrastructure hub with world-class data centre architecture that supports power, cooling and connectivity at scale.”
Sanjay Daga CEO and Managing Anex Advisory: “Looking at the Budget through the lens of redevelopment and urban housing, the real test isn’t in one-off announcements, it’s in how policy, infrastructure spend and clarity of execution create confidence over time. Real estate players have been asking for measures around housing affordability, rental assets and streamlined approvals, and the government’s emphasis on macro stability and capital outlay gives a structural backdrop for that dialogue. But for cities like Mumbai, where redevelopment projects are multi-year undertakings, long-term policy stability, sustained connectivity investment, and administrative clarity are the signals that truly move the needle.”
Aditya N. Shah, Joint Managing Director, Mayfair Housing: “There is nothing materially new in Budget 2026 for real estate or homebuyers, as existing tax structures and policy frameworks remain unchanged. However, the sector is entering this phase from a position of strength. If capital markets stay buoyant and consumer sentiment improves, housing demand could continue on its current trajectory—making this a budget that relies on market confidence rather than fiscal stimulus to drive real estate growth.”
Parthh K Mehta, CMD, Paradigm Realty: “Budget 2026 offers little for the real estate sector to celebrate. There are no fresh incentives for homebuyers, no enhancements in deductions, and no policy recalibration—only a continuation of last year’s framework. While personal finance remains stable and housing demand has already shown resilience, the absence of targeted real estate measures is a clear miss. The government seems to be betting on market momentum, sentiment driven by equity performance, and organic demand rather than policy-led stimulus.”
Chintan Sheth Chairman and Managing Director, Sheth Realty: “Finance Minister Nirmala Sitharaman has presented Indians with a Budget that proposes strengthening of India’s urban transformation backbone through sustained investment in building quality infrastructure. The clear focus on connectivity, quality, and long-term growth is seen with the increase in public capex to Rs 12.2 lakh crore. With the proposed expansion of high-speed rail and urban infrastructure, this will significantly elevate the appeal of various micro-markets. The introduction of the Infrastructure Risk Guarantee Fund is a progressive move that enhances confidence across the development cycle, enabling timely execution of high-quality projects. Equally important is the push for domestic manufacturing of advanced infrastructure equipment from elevators to safety systems which will raise construction standards. It will improve reliability, bring down costs and align Indian real estate with global benchmarks. These measures collectively support developers like Sheth Realty in pushing boundaries, redefining premium living, and delivering lifestyle experiences that are truly world-class.”
Prashant Khandelwal, Joint Secretary of CREDAI MCHI and CEO of Agami Realty: “Budget 2026-27 has signalled optimism for the real estate sector through two strategic interventions – the proposed Infrastructure Risk Guarantee Fund will improve access to capital and speed up the completion of large infrastructure projects, consequently positively impacting the growth of the real estate by improving connectivity. Further, the move to recycle of significant real estate assets that are presently held by Central Public Sector Enterprises (CPSEs) through the creation of REITs will improve productive use of existing land resources, which is a boon for land-starved cities such as Mumbai. The real estate sector could also benefit from the proposed scheme to enhance construction and infrastructure equipment, which will strengthen domestic manufacturing of high-value and technologically advanced equipment – the resultant financial and efficiency gains can be passed on to customers, resulting in higher value and better quality projects. The budget makes mention of an infrastructure push, which is a key driver for the real estate sector. At the same time, we urge policy-makers to take into consideration the affordable housing sector and the domino effect it can have on employment, consumption, and social stability. Favourable policy measures can encourage developers to turn their attention to this segment, and help ensure inclusive and sustainable urban growth."
Samyag M. Shah, Director of Marathon Nextgen Realty Ltd, CREDAI – MCHI Youth wing – Convenor: “The government’s long-term push for urban development and housing affordability, is clear in the Union Budget 2026-27. The continued emphasis on infrastructure reinforces the government’s commitment to connectivity, unlocking new growth corridors and strengthening demand across Tier-1 and Tier-2 markets with a capex increase of a record Rs 12.2 lakh crore for this fiscal. The asset monetisation proposal to utilise Central Public Sector Enterprise real estate assets must be welcomed as the strategic use of public land will help create opportunities for mixed-use development and optimum land utilisation. The proposal to set up an Infrastructure Risk Guarantee Fund is also an important practical step that the Budget offers to address long-term project financing. Funds have been a key challenge for the sector and will improve access to credit for large projects and bring in greater certainty to execution. In the long term, I feel this will support smoother delivery and more predictable outcomes, which ultimately benefits homebuyers as well as developers.”
Anuj Goradia, Director of Dosti Realty: "The Union Budget has yet again reinforced the government’s long-term commitment to infrastructure-led growth and is a strong positive for the real estate sector across segments. The sharp increase in public capex to Rs 12.2 lakh crore, along with the continued focus on high-speed rail corridors and infrastructure development in Tier II and Tier III cities, will significantly enhance urban connectivity and liveability. These are key drivers for residential demand and large-scale township developments. The proposed Infrastructure Risk Guarantee Fund is a welcome step that will improve lender confidence and ease financing during the construction phase, enabling developers to execute projects with greater efficiency. The added push for domestic manufacturing of high-value, technology-advanced infrastructure equipment such as elevators and fire-fighting systems will help reduce costs, improve quality, and ensure timely project delivery. We see the expansion of REITs as a further strengthening of capital recycling and transparency, creating a healthier, more sustainable ecosystem for real estate development in India."
Suhan Shetty, Industrialist and Founder of Rubics Group: "Budget 2026-27 introduces strategic measures designed to make home-ownership more desirable and stimulate holistic growth for the real estate sector. These include the establishment of an Infrastructure Risk Guarantee Fund, which will improve access to capital for large-scale projects that, in turn, drive real estate development. Further, the proposal to recycle significant real estate assets held by Central Public Sector Enterprises (CPSEs) through Real Estate Investment Trusts (REITs) will unlock existing land resources for more productive use. The budget's focus on strengthening domestic manufacturing of high-value, technologically advanced equipment promises to directly reduce construction input costs and project timelines, benefiting both developers and end-users."
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