India’s real estate sector is on the cusp of an unprecedented financial transformation, with an estimated ₹50 lakh crore capital requirement by 2036, according to a new report by ANAROCK Capital.

Titled “Powering the Next Decade: India’s Real Estate Finance Transformation Story”, the report outlines how the sector is evolving into a more institutional, transparent, and diversified ecosystem, even as critical gaps—especially in affordable housing—remain unresolved.

From Capital Scarcity to Capital Concentration

Over the past decade, India’s real estate financing landscape has shifted significantly:

• From NBFC-led funding dominance to a broader mix of banks, AIFs, REITs, and private credit
• Stronger regulatory frameworks including RERA, GST, and IBC improving transparency
• Increasing participation from institutional and global investors

However, the report highlights a paradox:

Capital is no longer scarce—but it is unevenly distributed.

Most funding continues to flow toward top developers in metro cities, leaving affordable housing and smaller developers underfunded.

Affordable Housing: The Biggest Structural Weakness

Despite strong demand, affordable housing remains the sector’s most critical blind spot:

• 4.5 lakh+ stalled homes across 1,500+ projects
• ₹55,000 crore funding gap required to complete them
• Only 10% of new launches in Q1 2026 priced below ₹40 lakh (down from 26% in 2021)

At the same time, premium housing (₹1.5 crore+) now accounts for 53% of new launches, indicating a clear shift in developer focus toward higher-margin projects.

The report underscores that India’s housing challenge is no longer demand-driven, but a financing and capital allocation problem.

Housing Finance Market Doubling Fast

India’s housing finance ecosystem is witnessing rapid expansion:

• ₹38 lakh crore outstanding home loans (2026)
• Expected to reach ₹77 lakh crore by 2030
• Growing at a 15% CAGR

Home loans remain the largest component of real estate financing, reflecting deepening retail participation and rising homeownership aspirations.

Commercial Real Estate: Banks Dominate Lending

In commercial real estate (CRE):

• Banks account for 56% of total lending (~₹5.2 lakh crore)
• NBFCs and HFCs contribute 22%
• 80% of lending concentrated in top cities:
  • Mumbai Metropolitan Region (MMR)
  • NCR
  • Bengaluru

This concentration further reinforces the metro-centric nature of capital flows.

REITs: Big Potential, Low Penetration

India’s Real Estate Investment Trust (REIT) market has grown but remains underdeveloped:

• 6 listed REITs with combined market cap over ₹2 lakh crore
• Yet, REITs account for only:
  • 0.4% of total stock market capitalization
  • 20% of listed real estate value

Out of 520 million sq ft of REIT-worthy office stock, only 198 million sq ft is currently listed, indicating significant untapped potential.

SWAMIH Fund & Policy Push to Unlock Stalled Projects

Government intervention has played a key role in addressing stalled housing:

• SWAMIH Fund has enabled completion of 58,000+ homes
• SWAMIH 2.0 (₹15,000 crore) aims to unlock 1 lakh additional homes
• Pradhan Mantri Awas Yojana 2.0 targets 1 crore new urban homes

These initiatives are critical in reviving stuck projects and restoring buyer confidence.

New Growth Segments Attracting Long-Term Capital

The next wave of real estate investment is shifting toward emerging asset classes:

• Data centres (expected to exceed 8 GW capacity by 2030)
• Warehousing & logistics (605 million sq ft stock)
• GCC-led office demand (1.2 billion sq ft by 2030)
• Industrial and tech infrastructure

These sectors are attracting long-term, yield-focused global capital, strengthening the sector’s resilience.

India Positioned Strong Despite Global Uncertainty

While global headwinds such as geopolitical tensions and market volatility persist, India’s real estate sector remains supported by:

• Strong domestic demand
• Infrastructure investments
• Regulatory reforms
• Supply chain shifts favoring India

The report concludes that India is well-positioned to convert global disruptions into long-term domestic growth opportunities.

The Big Picture

India’s real estate sector is entering a new phase—not defined by lack of capital, but by access to it.

The next decade will depend on:

• Expanding capital access beyond metros
• Funding affordable housing at scale
• Strengthening financial inclusion in real estate

If these challenges are addressed, the sector could evolve into a $5–7 trillion market by 2047, making it one of the most significant pillars of India’s economic growth story.

Also Read: IT Dept carries out search operations on a Mumbai based real estate group

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Projects Near Completion

The Lake, New Chandigarh

• Premium group housing
• Saleable area: 28 lakh sq. ft.
• Total units: 1,402

Omaxe Shiva, Shiva 2 & Shiva 3, Prayagraj

• Independent floors
• Saleable area: 5.6 lakh sq. ft.
• Total units: 304

Both projects received last-mile construction support from the SWAMIH Fund, with sanctioned amounts of:

• ₹168.80 crore for The Lake
• ₹60.40 crore for the Prayagraj developments

Full Repayment from Internal Cash Flows

Omaxe utilised only ₹70 crore from the sanctioned SWAMIH funding and has already repaid around ₹80 crore, entirely from internal project-generated cash flows. The repayment follows substantial completion across both project clusters and reflects the company’s:

• Strong sales momentum
• Healthy liquidity position
• Efficient capital allocation
• Customer-focused project delivery

Strengthening Financial Position

The successful closure of SWAMIH obligations further improves Omaxe’s financial stability and reduces leverage. The developer credited the Fund’s support for enabling timely last-mile execution and reaffirmed its commitment to transparent, responsible construction practices.

With these milestones, Omaxe continues to reinforce its reputation for execution reliability and customer trust across key markets.

Also Read: Omaxe Group Launches The Omaxe State with ₹2,500 Crore Investment

The post Omaxe Completes Key Projects in Chandigarh & Prayagraj, Fully Repays SWAMIH Funding appeared first on Square Feat India.

“Stressed projects today represent not just discounted buys, but a way to re-engineer supply in under-served, overpriced markets. It’s a win-win when execution meets capital,”
— Vikas Jain, CEO, Labdhi Lifestyle

Case in Focus: Labdhi Lifestyle’s BKC EDGE

Labdhi Lifestyle recently acquired a stalled Rajesh LifeSpaces project in Mumbai’s BKC—originally backed by Mirae Asset and JM Financial—and rebranded it as BKC EDGE. With a revenue potential of ₹900 crore, this marks Labdhi’s second successful turnaround in Mumbai.

“With the right capital strategy and execution, distressed projects can become high-performing assets,”
— Jain

What’s Driving the Shift?

Deep Discounts

Projects are available at 30–60% below market value, offering high upside once completed.

Demand for Completion

Homebuyers today prefer ready or near-ready homes, allowing faster monetization for investors.

SWAMIH Fund

The ₹15,000 crore government-backed SWAMIH Fund has boosted investor confidence in public-private partnerships to revive stalled projects.

Rise of Specialized Capital

Private equity, family offices, and ARCs are setting up distress-focused investment verticals to absorb these assets.

“We believe stressed projects could become the sunrise segment of Indian real estate,”
— Prashant Sharma, President, NAREDCO Maharashtra

MMR: The Epicenter of Turnarounds

The Mumbai Metropolitan Region (MMR), known for land scarcity and high prices, is at the heart of India’s distressed project wave.

• 70,000+ housing units are stalled across 493 projects, mainly due to new environmental clearance norms.
• These offer a ripe opportunity for design-led redevelopment and capital infusion.

“We’re repackaging distressed projects into viable investment stories. It’s all about building trust between capital and capability,”
— Nihar Jayesh Thakkar, Founder, The Mandate House Pvt. Ltd.

Three Pillars for Successful Turnaround

1. Legal & Title Clarity
2. Market-Fit Redesign
3. High-Credibility Delivery Team

“Without execution reliability, no structure—financial or legal—can sustain,”
— Thakkar

Risks Remain

Challenge	Impact
Litigation	Disputes among lenders, buyers, or landowners slow down progress.
Approval Bottlenecks	Changes in plans require new permits, adding time.
Reputational Hurdles	Buyer hesitation around legacy brands unless revived by credible players.

To address these, many investors are forming SPVs (Special Purpose Vehicles) with developers to enter cleanly and speed up resolutions.

Final Word

“In real estate, timing is everything. And for stressed assets, the time is now,”
— Jain

With the right alignment of policy, capital, and execution, India’s most stalled assets could become its most profitable stories. In a market seeking stable returns, distressed projects are no longer a liability—they are an opportunity in waiting.

Also Read: Regulatory Changes are Reshaping NBFCs in the Real Estate Sector

The post From Crisis to Opportunity: Stressed Real Estate Projects Emerge as India’s Next Investment Frontier appeared first on Square Feat India.

Real Estate Tops Sectoral AIF Investment

As per data compiled from SEBI and ANAROCK Research, real estate accounted for the highest share of cumulative net AIF investments till the first nine months (9M) of FY2025, with ₹73,903 crore infused into the sector. This represents 15% of the total ₹5,06,196 crore invested across various sectors.

Net AIF Investments by Sector – 9M FY2025

The ₹73,903 crore investment in real estate marks an 8% increase from ₹68,540 crore at the end of FY2024—signaling continued momentum in the sector despite macroeconomic headwinds.

AIFs Powering Real Estate Revival

“Amidst increasing constraints on traditional funding sources, AIFs are an agile and innovative financing mechanism to address capital gaps at various stages of real estate development,” said Prashant Thakur, Regional Director & Head – Research, ANAROCK Group.

He added that the future of AIFs lies in blended finance models, AI-driven risk assessments, and streamlined regulatory frameworks, all of which will maximize their impact on infrastructure and housing.

Commitments Skyrocket Across the Decade

The AIF sector in India has grown exponentially, with commitments rising from ₹2.82 lakh crore in FY2019 to ₹13.05 lakh crore in 9M FY2025—a near five-fold increase. From just 42 registered AIFs in 2013, the number surged to 1,524 as of March 2025.

AIF Commitments: FY2019 vs 9M FY2025

Category II AIFs—comprising real estate, private equity, debt funds, and fund of funds—have been the primary growth engine, accounting for nearly 80% of total AIF commitments over the past five years.

SWAMIH Fund: Real Estate’s Financial First Responder

India’s flagship real estate AIF, the SWAMIH Fund, has played a pivotal role in reviving stalled housing projects, injecting over ₹35,000 crore into the market. It has successfully enabled the completion of thousands of homes for distressed homebuyers.

“The SWAMIH Fund has been an unmitigated boon for homebuyers across the country,” said Anuj Puri, Chairman, ANAROCK Group. “However, the Fund’s journey is fraught with regulatory, financial, and operational challenges.”

Challenges Facing SWAMIH Fund

Despite its success, SWAMIH still faces systemic roadblocks that limit its full potential.

Key Bottlenecks

“Fixing India’s housing crisis needs more than capital — it demands reform,” added Puri.

Conclusion: AIFs Driving New Era in Real Estate Funding

AIFs are no longer on the fringes of India’s investment ecosystem. With growing institutional interest, high net-worth participation, and a sharp focus on real estate, they are positioned to bridge critical funding gaps in urban development and housing.

As regulatory frameworks evolve and adoption widens, AIFs—particularly Category II and vehicles like SWAMIH—are likely to redefine the contours of real estate financing in the country.

Also Read: Modern Real Estate Investment Approaches Empowering Retail Investors in Long-Term Wealth Building

The post Real Estate Leads AIF Net Investments with ₹73,903 Cr Infusions Till 9M FY25 appeared first on Square Feat India.

Homebuyers from projects including Avant Hillways, Vision Heights, and Shubham Trident received possession of their apartments, signaling the fund’s success in reviving stalled housing developments. The SWAMIH Fund, established in 2019 and managed by SBI Ventures Ltd., a subsidiary of the State Bank of India, was designed to provide last-mile financing to stressed and brownfield residential projects.

Speaking at the event, Sitharaman emphasized the government’s commitment to addressing housing sector challenges. “The SWAMIH Fund has played a crucial role in ensuring that thousands of families who had been waiting for their homes for years can now finally move in. This initiative reflects our dedication to reviving distressed projects and restoring confidence in the real estate sector,” she said.

Mr. Prem Prabhakar, Managing Director and CEO of SBI Ventures Ltd., underscored the impact of the fund, stating, “With the vision and support of the Government of India, this fund has enabled the completion of numerous housing projects, providing long-awaited relief to homebuyers.”

As India’s largest social impact fund for the real estate sector, SWAMIH operates under the sponsorship of the Ministry of Finance, addressing funding gaps and ensuring financial stability in the housing market. By targeting distressed projects, the fund is also stimulating credit growth and facilitating access to home loans, contributing to broader economic resilience.

The successful completion of 50,000 homes underlines SWAMIH’s role in stabilizing the real estate sector while supporting India’s economic recovery. The initiative continues to be a crucial mechanism for assisting homebuyers affected by stalled developments and driving inclusive growth in the housing market.

Also Read: budget expectations for real estate

The post FM Nirmala Sitharaman Hands Over Keys to Homebuyers as SWAMIH Fund Completes 50,000 Homes appeared first on Square Feat India.

What Has Changed?

Previously, under the Income Tax Act, if an individual owned more than one property but did not rent it out, they were still required to pay tax on notional rental income—essentially, a tax on the assumed rent they could have earned. The new policy eliminates this tax on a second self-occupied home, providing significant relief to homeowners and investors.

Industry Reactions

Experts from the real estate industry have welcomed this move, highlighting its potential impact on homebuyers and the housing market.

Domnic Romell, President, CREDAI-MCHI

“The move to allow taxpayers to claim the annual value of two self-occupied properties as nil is a significant step. Previously, homeowners could claim tax exemption on only one self-occupied property, while additional properties were subject to tax—even if they were not rented out. This progressive reform provides substantial tax relief, encourages homeownership, and acknowledges the evolving housing needs of Indian families.”

Anuj Puri, Chairman – ANAROCK Group

“This change is a positive move for residential real estate investment. By allowing homeowners to claim Nil valuation for two self-occupied properties, the government has removed the burden of taxation on notional rental income from a second home. This step minimizes tax pressures, promotes homeownership, and facilitates real estate investment, particularly in second homes and Tier 2 and 3 cities.”

What This Means for Homebuyers and Investors

1. Encourages Real Estate Investment – With the removal of tax on the second self-occupied property, more individuals will be inclined to buy a second home—whether as an investment or a weekend retreat.
2. Boosts Housing Demand – The reform is expected to increase demand for housing, particularly in Tier 2 and Tier 3 cities, where second-home purchases are on the rise.
3. Supports Long-Term Financial Planning – Buyers can now own multiple properties for personal use without worrying about additional tax burdens, making real estate a more attractive long-term asset.
4. Strengthens Rental Markets – Although the exemption applies to self-occupied properties, it reduces financial constraints on property owners, which could lead to a more flexible and dynamic rental market.

Final Thoughts

The exemption on notional rental income for two self-occupied properties is a pro-consumer, pro-real estate move that will benefit middle-class homebuyers, investors, and the housing sector as a whole. With growing urbanization and increasing aspirations for homeownership, this policy change is expected to have a lasting impact on India’s real estate landscape.

For those looking to purchase a second home, now might be the best time to invest.

Also Read: Affordable Housing Crisis: Will Budget 2025-26 Turn the Tide?

The post New Tax Exemption on Two Self-Occupied Properties: A Game-Changer for Homebuyers and Investors appeared first on Square Feat India.

Key Budget Highlights Impacting Real Estate

• Zero Income Tax Up to ₹12 Lakh: This move is expected to boost disposable income and increase housing demand, particularly in the affordable and mid-income segments.
• ₹1 Lakh Crore Urban Challenge Fund: Aims to transform cities into economic hubs, supporting infrastructure and real estate growth in Tier 1 & Tier 2 cities.
• ₹15,000 Crore SWAMIH Fund 2.0: Expected to revive 1 lakh stalled housing units, benefiting homebuyers and developers facing liquidity constraints.
• TDS on Rental Income Increased: Raising the TDS limit on rent from ₹2.40 lakh to ₹6 lakh will ease compliance burdens and improve rental housing investments.
• Tax Exemption on Two Self-Occupied Properties: Homeowners can now claim tax benefits on two properties instead of one, reducing tax burdens and promoting real estate investments.
• Expansion of GCCs in Tier-2 Cities: Will drive commercial real estate demand in emerging cities, boosting office space and warehousing needs.
• Digitization of Land Records: Expected to enhance transparency and efficiency in real estate transactions, boosting homebuyer confidence.

Industry Reactions

Dr. Niranjan Hiranandani, Chairman, NAREDCO & Hiranandani Group

The budget strengthens infrastructure investment and real estate demand, with the SWAMIH Fund 2.0 ensuring the completion of stalled projects. However, inadequate long-term investment and the absence of affordable housing incentives remain concerns.

Domnic Romell, President, CREDAI-MCHI

The increase in income tax exemption and rental TDS limits will benefit middle-class homebuyers and landlords. The SWAMIH Fund’s expansion is a welcome move, but further policy reforms, including GST rationalization, are needed to unlock the sector’s full potential.

Prashant Sharma, President, NAREDCO Maharashtra

While tax relief and urban development initiatives are positive steps, the budget lacks direct incentives like industry status and single-window clearances that could have accelerated real estate growth.

Badal Yagnik, CEO, Colliers India

The budget furthers the vision of ‘Viksit Bharat’ with reforms in urban development, taxation, and regulatory frameworks. The SWAMIH Fund extension and Urban Challenge Fund will accelerate real estate growth, while rationalized taxes will spur investments in residential real estate and REITs.

Shrinivas Rao, CEO, Vestian

The budget’s focus on employment generation, infrastructure, and increased disposable income will drive demand across all real estate segments. Additionally, the SWAMIH Fund and digitization of land records will strengthen homebuyer confidence. Infrastructure upgrades, particularly in air cargo, will fuel warehousing demand nationwide.

Piyush Bothra, Co-Founder & CFO, Square Yards

The zero-tax provision up to ₹12 lakh will boost homebuyers’ purchasing power. The ₹15,000 crore SWAMIH Fund is a crucial intervention for stalled projects, but increased home loan deductions could have further enhanced affordability and eased credit constraints.

Rohan Khatau, Director, CCI Projects

Infrastructure spending and PPP initiatives are welcome, but key reforms such as stamp duty rationalization and higher home loan interest deductions were expected. The sector may require mid-year policy interventions.

Vikas Sutaria, Founder, Irah Lifespace

The budget lacks incentives for NRI and HNI investments in luxury real estate. While TDS rationalization helps, easing investment norms for these segments could have further boosted the sector.

Shraddha Kedia-Agarwal, Director, Transcon Developers

The Urban Challenge Fund and infrastructure-focused projects will drive growth, but the real estate sector still needs tax rebates and industry status for sustained expansion.

Samyak Jain, Director, Siddha Group

The revamped tax structure and middle-class benefits will increase disposable income, empowering homebuyers and fueling sectoral growth.

Abhishek Jain, COO, Satellite Developers

The budget’s emphasis on urban development and tax relief is positive, but liquidity issues, taxation burdens, and policy hurdles remain. A more comprehensive real estate policy is required.

Manju Yagnik, Vice Chairperson, Nahar Group & Senior VP, NAREDCO Maharashtra

The budget strengthens economic resilience with its focus on infrastructure. However, a targeted housing policy and tax incentives would have further fueled real estate growth.

Rajiv Agrawal, Co-Founder, Saarathi Realtors

The tax relief and SWAMIH Fund 2.0 will make homeownership more accessible, unlocking new investment opportunities in real estate.

Anuj Puri, Chairman, ANAROCK Group

The budget focuses on economic growth, consumption, and infrastructure but lacks major announcements for affordable housing, leaving stakeholders hoping for mid-year interventions.

Conclusion

The Union Budget 2025-26 introduces significant tax relief and urban development initiatives, indirectly benefiting the real estate sector. However, industry experts believe the absence of direct incentives—such as higher home loan deductions, single-window clearances, and GST rationalization—limits the sector’s full growth potential. While the middle class gains from tax relief, developers and investors look forward to further structural reforms to sustain long-term real estate momentum.

Also Read: budget expectations for real estate

The post Budget 2025: Tax Relief on Two Homes, ₹15,000 Cr SWAMIH Fund & Urban Growth Push Real Estate Forward appeared first on Square Feat India.