As India prepares for Union Budget 2026, real estate leaders are calling for continuity over disruption. After a year shaped by global volatility, elevated interest rates and uneven recovery across asset classes, the sector’s expectations from the upcoming Budget remain pragmatic: policy stability, predictable taxation, faster approvals and targeted affordability support.
Rather than sweeping incentives, developers and industry leaders believe a steady policy hand could help sustain demand, unlock redevelopment potential in cities, and strengthen the sector’s contribution to economic growth.
Stability Over Stimulus: Confidence Built on Policy Continuity
For many developers, the key takeaway from recent Budgets has been stability. Ram Raheja, Managing Director, S Raheja, says the previous year’s Budget played a crucial role in anchoring confidence in an otherwise uncertain environment.
“In a year marked by global and domestic uncertainty, the Union Budget helped anchor stability in the housing market, reinforcing buyer confidence,” Raheja says. According to him, this stability translated into consistent demand, particularly in premium and luxury housing, where purchase decisions are driven by long-term outlook and trust rather than short-term incentives.
As Budget 2026 approaches, Raheja believes continuity will matter more than new sops. Predictable tax structures, consistent policies, and smoother approval and transaction processes are essential for developers to maintain execution momentum and deliver projects on time. When these fundamentals are in place, the sector is better positioned to support sustained demand and contribute to structured urban growth.
Redevelopment in Focus as Cities Expand Inward
In large urban centres, redevelopment remains a critical growth engine, offering a sustainable pathway to increase housing supply without expanding city footprints. Ashka Pandit, Director, Sri Lotus Developers, says the Union Budget has a defining role to play in shaping redevelopment-led growth.
“As urbanisation continues at pace, redevelopment remains a sustainable pathway to expand housing supply while rejuvenating existing neighbourhoods,” Pandit says. In dense cities where land availability is limited, redevelopment enables modern housing, improved infrastructure and enhanced liveability.
From Budget 2026, Pandit expects continued policy stability with a sharper focus on urban development frameworks that allow redevelopment projects to move faster. Measures that strengthen planning systems and promote coordinated development can unlock significant housing potential within established urban areas.
A development-oriented Budget, she adds, can act as a catalyst for urban transformation, enabling cities to grow inward while delivering better-quality homes and expanding homeownership opportunities.
Affordability Takes Centre Stage Amid Rising Costs
While stability and redevelopment remain priorities, affordability is emerging as a key pressure point, particularly in major metros. Rakesh Reddy, Director, Aparna Constructions, says the sector’s long-term contribution to the economy depends on addressing structural bottlenecks through Budget-led reforms.
“India’s real estate sector has the potential to contribute over 15 percent to GDP over the medium term, provided Budget 2026 addresses key structural issues,” Reddy says. Stable and predictable policy support will be essential to sustain demand and improve affordability across housing segments.
He points to targeted fiscal interventions such as enhanced tax benefits on home loans, rationalisation of long-term capital gains, and a more contemporary definition of affordable housing as measures that could ease buyer stress and unlock end-user demand.
Rethinking the Affordable Housing Threshold
One of the industry’s long-standing demands is revisiting the ₹45 lakh cap for affordable housing. According to Reddy, the current threshold no longer reflects urban market realities, particularly in metros where property prices and construction costs have risen sharply.
“With housing EMIs accounting for a significant share of household income in several cities, affordability is likely to be a key focus area this year,” he says. A calibrated revision of the affordable housing definition, along with faster approvals and improved access to formal finance, could ease repayment pressures and stimulate housing-led consumption across sectors.
As residential growth increasingly extends to Tier II and emerging cities, such recalibration could also support more inclusive and sustainable urban expansion.
Premium Housing Still Matters
Even as affordability remains central, industry leaders stress that premium and luxury housing cannot be ignored. Reddy notes that policy support enabling credible developers to cater to premium demand plays an important role in anchoring investor confidence, enabling large-scale urban development and supporting employment across construction and allied industries.
Luxury housing, he argues, is not merely discretionary consumption but a key pillar supporting capital inflows, project viability and urban transformation in major cities.
A Balanced Budget for a Maturing Sector
Across voices, a common thread emerges: Budget 2026 need not be dramatic to be effective. Real estate leaders are seeking a balanced approach that combines policy continuity, targeted affordability measures, redevelopment support and streamlined approvals.
With buyer sentiment stabilising and demand holding firm in key segments, the sector appears poised for steady growth. A Budget that reinforces predictability and execution efficiency could help real estate play a more meaningful role in India’s urban and economic trajectory in the years ahead.
