Presented against a backdrop of steady economic growth, easing inflation and fiscal discipline, the Budget prioritises policy continuity over real estate-specific stimulus. For homebuyers, this means affordability will not improve through tax breaks or subsidies—but connectivity, new urban regions and long-term liveability may improve significantly.

No Direct Relief for Homebuyers, Especially Affordable Housing

From a real estate perspective, the Budget remains largely non-interventionist. There are:

• No new tax benefits for homebuyers
• No changes to income tax slabs
• No fresh incentives for affordable housing, despite rising construction and borrowing costs

This is a disappointment for first-time and budget homebuyers, particularly when affordability pressures remain elevated.

As Shishir Baijal, Chairman and Managing Director, Knight Frank India, noted, while the infrastructure push is welcome, the absence of real estate-specific fiscal incentives—especially for affordable housing—continues to be a concern for the sector.

Infrastructure Push: The Real Story for Future Home Prices

What the Budget lacks in direct housing relief, it compensates for through record capital expenditure of ₹12 trillion in FY27, reinforcing infrastructure as the government’s primary growth engine.

Sustained spending on transport, logistics and regional connectivity is expected to indirectly support housing demand across residential, commercial and logistics segments, especially over the medium term.

For homebuyers, this translates into:

• Better-connected suburbs
• New growth corridors beyond crowded metros
• Gradual appreciation driven by infrastructure execution rather than speculation

City Economic Regions: Tier-2 and Tier-3 Cities in Focus

A key announcement is the targeted development of City Economic Regions (CERs), with ₹5,000 crore allocated per region over five years.

These urban clusters are expected to:

• Create new employment centres
• Boost demand for housing, offices and retail
• Reduce pressure on top metros like Mumbai, Delhi and Bengaluru

For homebuyers, this opens up more liveable, affordable alternatives in emerging cities, provided project execution remains on track.

High-Speed Rail and Freight Corridors to Redefine Housing Catchments

The Budget continues funding for high-speed rail corridors, including:

• Mumbai–Pune
• Pune–Hyderabad
• Hyderabad–Bengaluru
• Chennai–Bengaluru
• Delhi–Varanasi

Such corridors expand commuting distances and redefine residential catchment areas, making peripheral towns viable for daily travel over the long term.

Similarly, new Dedicated Freight Corridors and National Waterways are expected to boost industrial and warehousing hubs—supporting job creation and housing demand in adjacent regions.

Tourism, Education and Healthcare to Create New Housing Demand

Beyond transport, the Budget focuses on:

• Tourism destination development
• University townships near industrial hubs
• Regional medical tourism hubs under PPP models

These initiatives support student housing, rental housing, second homes, hospitality-led residential projects and mixed-use developments, adding depth to housing demand beyond traditional end-use buying.

Data Centres and REITs: Indirect Stability for Real Estate Markets

The extension of tax holidays for data centres till 2047 positions digital infrastructure as a long-term growth driver, increasing demand for specialised real estate and power-ready land.

Meanwhile, the proposal to monetise CPSE real estate assets through REITs could:

• Unlock underutilised government land
• Improve transparency and institutional participation
• Strengthen long-term confidence in commercial real estate markets

What Homebuyers Should Take Away

Union Budget 2026 does not offer instant affordability relief—but it lays the groundwork for where future housing demand and price appreciation may emerge.

For homebuyers, the smartest strategy now is to:

• Track infrastructure execution closely
• Focus on emerging corridors and CER-linked cities
• Prioritise connectivity, employment access and long-term urban planning over short-term incentives

In short, this is a Budget for patient homebuyers—not bargain hunters.

Also Read: Real Estate Pins Hope on Union Budget 2022-23

The post Union Budget 2026 Sends a Clear Signal to Homebuyers: Infrastructure Will Drive Property Growth, Not Tax Sops appeared first on Square Feat India.

Infrastructure & Capex: Indirect Boost to Realty

According to Anuj Puri, Chairman – ANAROCK Group, the Budget acts more as a growth catalyst than an instant relief package for real estate. The increase in public capex to ₹12.2 lakh crore and the focus on Tier-2 and Tier-3 cities are expected to revive housing, commercial, and hospitality demand along upcoming transport and economic corridors.

The push for dedicated freight corridors and seven high-speed rail corridors is likely to unlock land value and development potential across new micro-markets.

REITs & Asset Monetisation: Institutional Capital Deepens

The proposal to create dedicated REITs for CPSE assets—covering railways, ports, telecom towers and government land—has been welcomed across the board.

Gautam Shahi, Director – Crisil Ratings, said the move reflects the maturity of India’s REIT ecosystem, boosting investor confidence while supporting the government’s asset monetisation agenda.

Anuj Puri added that this could help channel long-term institutional capital into Indian real estate, though clarity on taxation and framework is awaited.

Data Centres: Clear Winners of Budget 2026

One of the strongest positives comes from digital infrastructure. The tax holiday for data centres till 2047, combined with safe-harbour clarity, is expected to accelerate hyperscaler investments.

Shaishav Dharia, Director – Lodha Green Digital Infrastructure, called it a strong, long-term signal to global investors, already translating into foreign participation on digital infrastructure platforms, especially in MMR, Chennai, Bengaluru, and emerging Tier-2 hubs.

Capital Markets: Foreign Money Gets Easier Entry

From a broader investment lens, Mitesh Shah, CEO – Equirus Family Office, highlighted the Budget’s move to allow individuals resident outside India to invest directly in Indian equities, raising per-company limits to 10%.

This structural shift is expected to improve liquidity, reduce volatility, and bring longer-duration capital, indirectly benefiting real estate-linked stocks and REITs.

Affordable Housing: The Biggest Miss

Despite these positives, the absence of real estate-specific fiscal incentives—especially for affordable housing—has disappointed the sector.

Anuj Puri pointed out that affordable housing’s sales share has collapsed from over 38% in 2019 to around 18% in 2025, calling for urgent interest subsidies and definition reset.

Echoing this view, Shishir Baijal, Chairman & MD – Knight Frank India, said that while the Budget maintains macro stability and supports medium-term residential and logistics demand, it fails to address affordable housing concerns, which remain critical for inclusive urban growth.

Confidence & Structural Reform Outlook

Offering a broader perspective, Binaifer Jehani, Crisil Intelligence, noted that measures like the Infrastructure Risk Guarantee Fund, CPSE asset monetisation, and City Economic Region mapping improve financing confidence and signal a more data-driven, balanced urbanisation strategy.

Verdict: Good for Long-Term Growth, Weak on Social Housing

Union Budget 2026 is capex-driven, investment-friendly, and structurally positive for commercial real estate, REITs, data centres, logistics, and Tier-2/Tier-3 urban expansion.
However, the lack of direct affordable housing support keeps the impact moderate rather than transformative.

For developers and investors, the message is clear: long-term opportunity is intact—but inclusive housing remains an unresolved challenge.

Also Read: Real Estate Pins Hope on Union Budget 2022-23

The post Union Budget 2026: Real Estate Gets Long-Term Push, But Affordable Housing Left Behind appeared first on Square Feat India.

A central expectation from the budget is continued thrust on infrastructure-led development. Projects such as the Delhi–Panipat–Karnal Regional Rapid Transit System (RRTS), a 130-km high-speed corridor that will connect the National Capital Region with Haryana’s emerging cities in under 90 minutes, are being seen as transformative. Beyond easing travel, such corridors are expected to unlock new residential and industrial clusters, supporting metro decongestion and balanced urbanisation.

Alongside physical connectivity, industry voices are calling for fiscal measures that reflect present-day economic realities for homebuyers. With the Cost Inflation Index rising from 240 in 2014–15 to 376 for 2025–26, stakeholders argue that existing home loan interest deductions under Section 24(b) no longer provide the relief they once did, particularly for salaried middle-income families.

Real Estate as a Core Growth Engine

Real estate continues to be a significant contributor to employment and gross value added, and is increasingly viewed as a bridge between infrastructure investment and India’s long-term development vision for 2047. Developers believe Budget 2026 can play a decisive role in strengthening this linkage.

Rohit Gupta, CEO of Mantra Properties and Developers, emphasised the need for formal recognition of the sector.
“Ahead of Budget 2026 it is critical that policymakers recognise real estate as a core growth engine of the Indian economy. Granting industry status will reduce financing costs and unlock deeper credit from banks, lowering capital expenses for developers and ultimately buyers,” he said.

Gupta added that industry status would enable access to external commercial borrowings, attract long-term institutional capital such as pension and insurance funds, and improve liquidity across the sector. He also underlined the urgency of single-window clearances, GST rationalisation, housing affordability measures and calibrated tax incentives to enhance competitiveness and ensure sustainable, inclusive housing growth.

Echoing similar sentiments, Sidharth Pansari, Director of Primarc Group, said the budget could act as a strong confidence booster for the sector.
“The upcoming budget can act as a strong confidence trigger for real estate if it prioritises homebuyer affordability, liquidity support for developers, and faster infrastructure-led urban expansion. A clear policy push in these areas would not only revive end-user demand but also accelerate sustainable, long-term growth across cities beyond the metros,” he said.

Focus on Green Manufacturing and MSMEs

Manufacturing leaders are also looking to the budget for clarity and support, particularly as global markets increasingly demand adherence to sustainability benchmarks. With solar power investments becoming more financially viable and capital costs expected to stabilise around ₹3.5 crore per megawatt, policy incentives could significantly accelerate adoption—especially among MSMEs, which account for nearly 45% of India’s exports.

Industry executives are seeking measures such as enhanced depreciation benefits, simplified tax structures and smoother GST input credit mechanisms to free up working capital and improve competitiveness, while enabling a faster transition towards renewable energy-led manufacturing.

Deepening Non-Bank Credit and Capital Markets

The role of alternative capital providers is another key theme emerging ahead of the budget. Dr. Amit Goenka, Founder, Chairman and Managing Director of Nisus Finance, highlighted the growing importance of non-bank lenders in addressing India’s housing finance gap.

“With India facing a housing shortage of over 20 million units, the role of non-bank lenders has become increasingly critical. NBFCs today account for nearly 25–30% of real estate credit flows,” Goenka said, pointing to the need for policy measures that improve access to both domestic and offshore debt capital.

He noted that while real estate contributes close to 7.3% of India’s GDP, banks remain risk-constrained, creating space for AIF-led private credit to step in. “Category II AIFs alone now manage commitments exceeding ₹11 lakh crore and are emerging as a key channel for long-term capital deployment,” Goenka said. He called for parity in tax treatment for Category II AIFs, clarity on pass-through status, rationalisation of withholding tax on offshore debt, and stronger credit enhancement mechanisms to scale sustainable capital flows into urban development and infrastructure.

A Pivotal Budget Ahead

As expectations rise, industry leaders see Union Budget 2026 as a potential inflection point—one that can simultaneously advance urban connectivity, restore housing affordability, deepen credit markets and accelerate India’s transition towards sustainable manufacturing. If aligned effectively, these measures could help sustain growth momentum and move the economy closer to its ambition of becoming a $5 trillion economy by 2027.

Also Read: Budget 2023 Expectations – What’s in store for real estate in Union Budget 2023?

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