As India heads into Union Budget 2026, the real estate sector finds itself at an interesting crossroads. Demand for housing remains resilient, cities are expanding faster than their infrastructure can keep up, and commercial real estate is quietly reshaping how and where India works. Yet, rising property prices, high borrowing costs until recently, and tighter financing conditions have also exposed clear stress points. For developers, homebuyers, and investors alike, Budget 2026 is being watched as a moment to correct imbalances and push the sector into its next phase of growth.
At the heart of the discussion is housing affordability. For many urban Indians, especially first-time buyers, owning a home has become more aspirational than achievable. Industry leaders believe the Budget has a chance to restore confidence by directly addressing this gap.
As Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO- Maharashtra, puts it, "The real estate sector is looking to Budget 2026 for measures that can meaningfully expand homeownership and strengthen the residential ecosystem, particularly for first-time and mid-income buyers who are increasingly impacted by high property prices and borrowing costs."
Her point reflects a broader concern across the industry. While income levels have risen, property prices in large cities have climbed much faster, stretching affordability to its limits. Even well-meaning incentives often fail to reach the people who need them most because eligibility criteria no longer reflect market realities.
There is some optimism, however. The recent repo rate reduction has already improved sentiment, making home loans slightly more accessible. Yagnik acknowledges this shift, saying, "The recent repo rate reduction has provided a positive signal for the housing market, improving affordability and sentiment, and the Budget offers an opportunity to build on this momentum through targeted fiscal support." The expectation is clear. Monetary easing alone is not enough. Fiscal measures must step in to translate policy signals into real relief for homebuyers.
One of the strongest expectations from Budget 2026 is a renewed focus on reducing the effective cost of home loans. According to Yagnik, "A key expectation is a renewed focus on reducing the effective cost of home loans. Enhanced interest subventions, longer and more flexible loan tenures, and targeted incentives for first-time buyers can help convert lower policy rates into real EMI relief, especially in large urban centres where affordability remains stretched." In practical terms, this means smaller monthly outflows, more manageable repayment structures, and greater confidence among buyers sitting on the fence.
Another critical issue is outdated policy thresholds. Income limits and property value caps under various housing schemes often exclude genuine buyers simply because prices have moved ahead of policy definitions. Yagnik highlights this gap, noting, "There is also a need to revisit housing incentive frameworks to align eligibility thresholds with current market realities. Updating income and property value limits in line with rising urban prices can ensure benefits reach genuine." For many in the industry, this recalibration is long overdue.
While residential real estate looks for affordability-focused reforms, the commercial segment is hoping for a different set of policy nudges. Over the past few years, government spending on infrastructure and urban development has helped office markets regain momentum, even as work patterns evolve. Sudarshan Lodha, Co-founder and CEO of Strata, believes the groundwork has already been laid. “Over the last few Budgets, the government has laid a strong foundation for commercial real estate through infrastructure investment, urban development programs, and capital-market reforms such as REITs and asset monetisation."
The next step, he argues, is to address financing bottlenecks at the project level. Commercial developments often rely on complex funding structures, and clearer rules could unlock significant capital. Lodha explains, "As we look to Union Budget 2026–27, the next phase should focus on easing project-level financing, enabling structured private credit, and providing clearer tax and regulatory frameworks for alternative investment platforms." These changes could make it easier for developers to plan long-term projects while giving investors more confidence and transparency.
Such reforms could also help decentralise growth. With better financing access, office spaces can expand beyond traditional metro hubs into emerging business districts, creating jobs and supporting balanced urban development. As Lodha notes, "These measures can unlock long-term capital, support office expansion beyond core metros, and strengthen real estate’s role in employment and urban growth."
The expectations from Union Budget 2026 point to a clear theme. The sector is not asking for sweeping handouts but for smarter alignment between policy, market conditions, and long-term economic goals. From easing the homeownership journey for individuals to enabling sustainable capital flows into commercial projects, the real estate industry sees this Budget as a chance to turn steady recovery into lasting momentum.
