India’s real estate sector enters Budget 2026 with momentum, but also with clear pressure points. Demand patterns are shifting, affordability is tightening, and growth is moving decisively beyond the metros. Infrastructure investment has created new corridors, digital systems are reshaping access to credit, and Tier 2 and Tier 3 cities are emerging as serious residential and investment destinations. What the industry now seeks is not short-term stimulus, but policy clarity that matches economic reality.
Across banking, development, advisory, technology, and hospitality-linked housing, a common refrain emerges: stability, rationalisation, and reform. From redefining affordable housing and simplifying taxes to digitising approvals and recognising real estate as core infrastructure, leaders see Budget 2026 as a chance to reset the framework for long-term growth.
Digital public infrastructure and household finances
For Adhil Shetty, CEO of BankBazaar, the starting point is household income and access to formal credit. He argues that strengthening digital public infrastructure can quietly but significantly improve affordability and financial inclusion.
“As India prepares for Budget 2026, the focus is on easing pressure on household incomes while improving access to formal credit. A key lever is strengthening digital public infrastructure. An allocation of around Rs. 1 lakh crore under Digital India 2.0, encompassing DigiLocker, the Account Aggregator framework, and fully agentless 24/7 Video KYC can facilitate faster, safer, and more affordable loans and insurance.”
With Aadhaar-based systems already in place, Shetty sees deeper investment reducing friction across lending. “With Aadhaar-based KYC and consent-led data sharing already established, deeper investment can reduce processing delays, lower fraud risks, and cut delivery costs.”
Housing affordability, he notes, is also a policy mismatch. “Housing remains a priority. The Rs. 45 lakh affordable housing cap no longer reflects urban market realities; revising it can lower EMIs and revive housing-linked consumption.”
Shetty extends the argument to taxation and savings. From ESOP parity for MSMEs to inflation-indexed tax slabs and simpler deductions for insurance and pensions, his view is that freeing disposable income strengthens both housing demand and long-term financial stability.
Policy stability and unlocking institutional capital
From a developer’s lens, Akshay Taneja, CEO of TDI Infrastructure, emphasises predictability over piecemeal relief. “India’s real estate sector operates in a tightly regulated environment, and what it needs most is policy stability and a long-term vision rather than short-term relief.”
He frames Finance Bill 2026 as a pivotal moment. “With the Finance Bill 2026 being the last chance to set the stage before the new tax regime takes effect from April 1, the Budget must send clear, growth-oriented signals.”
Taneja points to the rise of Tier 2 cities and NCR’s outer belt as self-sustaining hubs driven by infrastructure. Revising the affordable housing definition, granting full industry status, and recognising housing as national infrastructure, he argues, could unlock large pools of institutional and NRI capital.
“Revising the affordable housing definition from Rs. 45 lakh to at least Rs. 70 -75 lakh, granting full industry status to real estate, and recognising housing as a core part of national infrastructure will unlock institutional capital and significantly boost employment.”
Tax simplification, GST rationalisation, uniform stamp duty, and single-window clearances, in his view, are not developer demands alone. They are prerequisites for faster delivery, buyer confidence, and planned urban expansion.
The affordability paradox in urban India
Ashish Narain Agarwal, Founder and MD of PropertyPistol, highlights a deeper structural shift. “India’s urban housing market is undergoing a sharp shift, with affordability declining and premium demand rising.”
The numbers tell a stark story. “HNI and NRI buyers now contribute ~18–20% of property investments, up from 7–10% a decade ago.” At the same time, “Affordable housing (below Rs. 45 lakh) has fallen from ~37% in 2021 to ~18% in 2025, while luxury homes (above Rs. 1.5 crore) have increased from 9% to 29%.”
With prices rising nearly 50 percent over five years, Agarwal sees policy reform as unavoidable. “With urbanisation projected at ~9.2% CAGR through 2028, policy reforms are critical.”
He calls for revisiting the affordable housing cap, rationalising capital gains, cutting GST on under-construction homes, and enhancing benefits for first-time buyers. Industry and infrastructure status, he adds, would help channel institutional investment into a market that is otherwise drifting up the price curve.
Tier 2 and Tier 3 cities need execution reforms
For Vishal Raheja, Founder and MD of InvestoXpert Advisors, infrastructure-led growth beyond metros is already underway. “Union Budget 2026 must decisively unlock the next phase of India’s real estate growth by strengthening infrastructure-led development in Tier 2 and Tier 3 cities.”
Airports, highways, transit, and digital connectivity are reshaping demand, but execution remains the bottleneck. “Complex regulatory frameworks, prolonged approval timelines, and fragmented land-record systems continue to delay execution, increase costs, and weaken buyer confidence.”
Raheja stresses that transparency matters, especially for first-time buyers and NRIs. Single-window approvals, faster land-record digitisation, a national transaction database, and rationalised stamp duty, he argues, would reduce friction and bring balance to growth across regions.
Tourism, rentals, and hybrid real estate models
Beyond traditional housing, Sunil Sisodiya, Founder and CEO of Neworld Developers, draws attention to the fast-evolving rental and holiday-home segment. “Continued policy stability and growth-oriented incentives will be critical in supporting India’s fast-evolving rental and holiday-home ecosystem, especially in high-tourism coastal markets.”
As beachside destinations attract global interest, Sisodiya sees an opportunity to formalise a hybrid residential-hospitality category. “There is a strong opportunity to position such destinations as world-class residential-hospitality hubs.”
Support around infrastructure financing, FSI flexibility, and hospitality-linked residential frameworks, he says, could unlock investment while improving sustainability and quality.
Digital engineering for safer infrastructure
Pete Nicholson, Senior Vice President at Nemetschek Group, widens the lens to infrastructure resilience. “As India prepares for the Union Budget, there is a strong opportunity to accelerate digital adoption across infrastructure projects to improve safety, quality, and resilience.”
While highway expansion has been significant, recent accidents, flooding, and structural failures highlight gaps in planning and maintenance. Nicholson argues that digital tools, geospatial analytics, and predictive modelling can transform how infrastructure is built and maintained.
“We hope the upcoming budget promotes incentives and frameworks for digital engineering and open standards across the sector.”
