As India heads into Union Budget 2026, the real estate sector finds itself at a critical crossroads. Demand for premium and luxury housing remains resilient, supported by rising incomes, investor interest and lifestyle-led buying. In contrast, affordable and mid-income housing, the backbone of first-time ownership and urban workforce accommodation, continues to face mounting pressure.
Rising land prices, higher construction costs and tighter financing conditions have widened the gap between the high end of the market and the mass housing segment. Developers and industry leaders now look to Budget 2026 for policy signals that can restore balance to the housing ecosystem without slowing the momentum achieved in premium markets.
A Market Moving at Two Speeds
Over the past few years, India’s housing market has evolved unevenly. Luxury homes and design-led projects have attracted strong demand and capital inflows, while affordability has steadily eroded for middle-income buyers. This divergence worries the industry, as sustainable growth depends on expanding the ownership base beyond the top end.
Developers argue that the affordable and mid-income segments are not short on demand, but constrained by economics. High input costs, compliance burdens and limited financing flexibility have made it increasingly difficult to deliver homes at price points that first-time buyers can manage.
Policy Stability Tops Developer Wish Lists
One of the strongest expectations from Budget 2026 is policy stability. Developers say predictable taxation and regulatory clarity are essential, especially for projects with long gestation periods.
Deepak Kapoor, Director, Gulshan Group, points out that quality-led and design-intensive developments require higher upfront capital and longer timelines. According to him, clarity on GST for construction inputs, works contracts and uniform compliance norms would reduce uncertainty and improve planning. He adds that granting industry status to real estate would significantly improve access to structured financing, boost investor confidence and help the sector move closer to global best practices.
Industry status remains a long-standing demand. Developers believe it would lower borrowing costs, encourage institutional participation and support long-term value creation across housing and commercial real estate.
Affordability and Buyer Relief in Focus
Another key theme emerging ahead of Budget 2026 is affordability. Industry leaders stress that tax structures and incentives have not kept pace with rising property values and loan sizes.
Sanjay Sharma, Director, SKA Group, believes rationalising stamp duty and simplifying tax structures can reduce the upfront burden on buyers and encourage quicker purchase decisions. When combined with continued home loan incentives, such measures could strengthen end-user demand and ensure more balanced growth across housing categories.
Several developers also point to outdated tax deduction limits, particularly under sections linked to home loan interest and principal repayment. Revisiting these thresholds could provide meaningful relief to first-time buyers and those upgrading to larger homes.
Reviving Stalled Projects and Restoring Confidence
Completion delays and stalled projects remain a concern in parts of the market, affecting buyer confidence and cash flows. Saurab Saharan, Group Managing Director, HCBS Developments, says Budget 2026 offers an opportunity to align policy with the sector’s true economic contribution.
He highlights the need for a dedicated revival fund for stalled projects at both central and state levels. Such a fund could help fast-track completions, ensure timely delivery of homes and rebuild trust among buyers. Improved access to organised financing, he adds, is especially critical for large luxury developments with extended timelines.
Infrastructure as the Growth Engine
Infrastructure spending continues to be seen as the single biggest catalyst for residential demand. Rakesh Kaul, CEO and Managing Director, Ralith Realty, notes that housing demand in India has historically followed infrastructure development.
Targeted investments in connectivity, urban utilities and social infrastructure can unlock new residential markets and support more balanced urban growth. When infrastructure planning aligns with housing supply, it improves liveability and reduces pressure on traditional city centres. Developers expect Budget 2026 to maintain a strong execution-focused infrastructure push.
A More Buyer-Centric Policy Approach
As the housing market matures, industry leaders argue that policy design must become more buyer-centric. Ashok Singh Jaunapuria, Managing Director and CEO, SS Group, points out that today’s homebuyers are financially informed and long-term in outlook, yet many ownership-linked tax benefits have not kept pace with market realities.
Revisiting tax incentives and easing financing constraints could significantly strengthen end-user demand. Equally important, he says, is improving approval timelines through faster and more transparent processes, which directly impact delivery schedules and buyer confidence.
Tax Incentives and Market Absorption
Mohit Batra, Regional Director, Realistic Realtors, believes recent policy direction has brought greater transparency and stability to the sector. For Budget 2026, he urges the government to address affordability more realistically by revising tax deductions and income limits that no longer reflect current housing prices.
Enhanced tax incentives could ease purchase decisions and improve market absorption, particularly in the entry and mid segments. Alongside this, continued infrastructure investment remains essential to support urban expansion and new housing corridors.
Broadening the Ownership Base
Several developers stress that long-term growth depends on expanding housing access beyond the luxury segment. Viren Mehta, Founder and Director, ElitePro Infra, says steady growth will come only when the industry serves a wider audience.
He advocates for greater tax relief on housing loans, especially under section 80C, to support first-time buyers and upgrade cycles. Incentivising developers to build affordable housing in metro peripheries and tier-2 cities, where demand is strong but margins are tight, also needs renewed attention.
Commercial Real Estate and Institutional Capital
The commercial property segment is also evolving. Harjeet Singh Sahni, CMD, Solitairriann Group, notes that quality and operational efficiency now matter more than sheer scale.
Supportive policies that improve access to funding, rationalise taxes on construction materials and streamline approvals would allow developers to invest in next-generation assets. Industry status, he says, would further encourage institutional participation and align commercial real estate growth with the broader economy.
Execution and Predictability Matter Most
For many in the sector, Budget 2026 will be judged by its ability to convert intent into on-ground momentum. Goldi Arora, Co-founder and Managing Director, Property Master, observes that buyers are often delaying decisions due to uncertainty around approvals, financing and post-tax costs rather than lack of demand.
A single-window clearance system could reduce execution risk, while better tax incentives for first-time buyers may unlock pent-up demand. Aligning tax and urban policies with current market realities could lead to more predictable housing cycles instead of sporadic growth spurts.
Looking Ahead
As Budget 2026 approaches, the real estate sector is not seeking dramatic shifts, but clear and consistent policy direction. Developers want coherence across housing, taxation and urban development to sustain momentum, improve buyer confidence and support India’s long-term urban growth story.
The coming budget has the potential to reinforce stability, revive affordability and ensure that housing growth remains inclusive, resilient and aligned with the country’s evolving economic landscape.
