As the Union Budget 2026 approaches, India’s real estate sector finds itself at a crossroads. After a year of strong momentum driven largely by premium housing and urban demand, the road ahead appears more complex. Global economic uncertainty, shifting buyer preferences, and mounting pressure on urban infrastructure are forcing policymakers to make careful choices. For industry leaders, this Budget is less about headline-grabbing announcements and more about structural clarity, fiscal balance and long-term confidence.
Across the sector, expectations are converging around a few key themes: strengthening economic fundamentals, improving affordability, unlocking private capital and addressing the growing strain on India’s cities.
Navigating uncertainty while strengthening fundamentals
For Shrinivas Rao, FRICS, CEO of Vestian, the starting point for Budget 2026 must be resilience. With global markets facing volatility and geopolitical tensions reshaping economic equations, Rao believes India must reinforce its domestic foundations.
He points to the accelerated development of tier-2 cities as a priority area. These cities, increasingly seen as growth engines, require sustained investment in infrastructure and better connectivity with major urban centres. “Enhanced infrastructure and improved connectivity are imperative,” Rao notes, adding that private sector participation will be crucial in scaling development efficiently.
One long-standing industry demand that resurfaces ahead of every Budget is the call for industry status for real estate. Rao argues that granting this status would significantly improve access to institutional financing, lower borrowing costs and encourage greater private investment. In a capital-intensive sector, easier access to formal funding could help developers plan projects more sustainably and reduce reliance on informal credit.
Rao also highlights the need to monetise government land, refine the definition of affordable housing and encourage mixed-use developments. Together, these measures could promote more efficient land use, support inclusive urban growth and align development with evolving work-live patterns.
Beyond real estate, Rao flags the importance of introducing a central-level policy for Global Capability Centres (GCCs). With India emerging as a global hub for GCCs, a structured framework could help sustain long-term growth, create employment and indirectly support demand for commercial and residential real estate.
Balancing growth, discipline and liveability
Amit Goyal, Managing Director of India Sotheby’s International Realty, views Budget 2026 as arriving at a particularly delicate moment. India remains one of the world’s fastest-growing major economies, yet the external environment is becoming more challenging.
According to Goyal, the government must strike a careful balance between maintaining fiscal discipline and continuing to support growth. Controlling borrowing costs is essential, but so is sustaining investment momentum if India is to achieve its ambition of becoming the world’s third-largest economy and a USD 5 trillion economy.
From a real estate perspective, Goyal acknowledges that 2025 delivered unmistakable momentum. However, sustaining this momentum will depend heavily on broader economic confidence. Buoyancy in equity markets, strong business sentiment and steady foreign capital inflows all play a critical role in keeping real estate demand healthy.
This is why Goyal believes Budget 2026 must include measures that encourage greater foreign direct investment. Policy stability, regulatory clarity and urban infrastructure spending are key signals global investors watch closely.
Urban development, in particular, features prominently in his expectations. Improving liveability in Indian cities, he argues, is no longer optional. Challenges such as air pollution, water quality, waste management and infrastructure gaps are now fundamental issues that directly influence quality of life and long-term real estate investment confidence.
Addressing these concerns meaningfully through budgetary allocations and policy intent will be critical not just for real estate growth, but for India’s broader urban aspirations.
Shifting focus from luxury to value housing
While premium housing led the upcycle in recent years, Tanuj Shori, Founder and CEO of Square Yards, believes the market is now entering a more value-driven phase. According to him, the mid-income segment is poised to anchor housing growth as luxury demand begins to stabilise.
Shori expects Budget 2026 to reflect this shift. A sharper focus on improving affordability is essential, particularly through enhanced tax relief for mid-income homebuyers and higher limits on interest deductions. Such measures could help improve price-to-income ratios and bring more end-users back into the market.
Equally important, Shori says, is policy support that encourages supply in the affordable and mid-market segments. Recent housing launches have been disproportionately skewed towards higher ticket sizes, creating an imbalance between supply and genuine end-user demand.
A budget aligned with these realities, he argues, can help strengthen housing absorption, support sustainable price growth and steer the sector into a more balanced phase of urban development.
A Budget that sets the tone
Taken together, the expectations from real estate leaders reflect a sector seeking stability over stimulus and structure over short-term incentives. Whether it is unlocking institutional capital, improving city liveability, supporting mid-income buyers or planning for future workplaces, Budget 2026 is seen as an opportunity to set the tone for the next phase of growth.
For real estate, the message is clear: growth must be inclusive, cities must be liveable, and policy must keep pace with a rapidly changing economy. How effectively the Budget responds to these signals could shape not just the sector’s trajectory, but the lived experience of India’s urban future.
