Union Budget 2026 Expectations: Real Estate Sector Seeks Push for Affordable and Rental Housing Amid Uneven Growth
NEW DELHI: As expectations build ahead of the Union Budget 2026, India’s real estate industry has called for urgent policy support to revive affordable housing and strengthen rental housing, warning that growth across the sector is becoming increasingly uneven. Industry leaders say while headline numbers still appear strong, deeper structural imbalances are emerging, particularly affecting middle- and lower-income homebuyers.
Anuj Puri, Chairman of the ANAROCK Group, pointed out that India’s housing market is showing a clear divergence between luxury and affordable segments. “India’s housing story remains strong on the surface but is structurally imbalanced underneath,” Puri said. According to ANAROCK data, new home sales volumes fell by 14 per cent in 2025, even as the total sales value rose 6 per cent to nearly ₹6 lakh crore. “This clearly shows that luxury housing is thriving, while affordable housing is under stress,” he added.
Puri stressed that Budget 2026 should continue accelerating last-mile urban infrastructure, which plays a critical role in unlocking real estate development across cities. He also urged the government to reintroduce the 100 per cent tax holiday under Section 80-IBA, arguing that the incentive had earlier driven affordable housing launches and encouraged wider developer participation.
Beyond tax incentives, industry leaders are seeking a revision of the definition of affordable housing. Niranjan Hiranandani, Chairman of NAREDCO (National Real Estate Development Council), said current price caps no longer reflect market realities. “A ₹45 lakh price cap does not align with today’s land and construction costs,” he said, urging the government to raise the threshold to at least ₹95 lakh for Mumbai and ₹75 lakh for other major cities, while retaining existing size norms.
Hiranandani also emphasised that rental housing must become a central pillar of the government’s ‘Housing for All’ vision. He called for the removal of stringent conditions under Section 80 IBA(6)(da) of the Finance Bill and recommended extending the benefit period for affordable rental housing projects to at least five years. He further suggested exempting rental income from properties held as stock-in-trade from taxation for five years after construction completion, acknowledging the long-term investment nature of such projects.
On taxation, Hiranandani flagged concerns over stamp duty calculations based on circle or ready reckoner rates, which often burden both buyers and sellers. He also criticised restrictions on setting off losses against income from house property, noting that such provisions discourage individual investment in rental assets.
Echoing similar views, Anshuman Magazine, Chairman and CEO for India, South-East Asia, Middle East and Africa at CBRE, said Budget 2026 should focus on deepening housing affordability while boosting overall consumption. He added that clearer long-term policies on urban redevelopment could help address supply gaps in high-density cities. Faster project approvals through single-window clearances and incentives for green and sustainable construction, he said, would improve project viability and investor confidence.
Magazine also highlighted the growing importance of India as a Global Capability Centre hub. With more multinational companies expanding their GCC presence, he said the government should focus on skilling initiatives, particularly in fast-growing areas such as artificial intelligence and machine learning.
From a developer’s perspective, Piyush Lohia, Director at Lohia Worldspace, stressed the importance of policy stability and infrastructure-led capital expenditure. He said continued rationalisation of personal income tax could ease pressure on the middle class and boost disposable incomes, supporting housing demand. “Regulatory clarity and infrastructure-led capex, especially in urban development, logistics, and housing, will be crucial for driving employment and investment,” Lohia said.
He also called for stronger support for MSMEs through easier credit access and GST simplification, along with incentives for green construction, renewable energy, and water conservation to promote sustainable growth.
Industry leaders broadly agree that a balanced Union Budget 2026, with targeted support for affordable and rental housing, could be critical in restoring broad-based growth in India’s real estate sector and ensuring housing demand remains inclusive.
Our Thoughts from TheTrendingPeople.com
The real estate sector’s expectations from Union Budget 2026 underline a growing concern: growth driven largely by luxury housing cannot sustain the broader housing ecosystem. Affordable and rental housing are not just social necessities but also economic multipliers that support employment, urban mobility, and consumption. A budget that addresses tax rationalisation, realistic pricing thresholds, rental housing incentives, and faster approvals could help correct structural imbalances. As India’s cities continue to expand and attract global businesses, housing policy will play a decisive role in shaping inclusive and sustainable urban growth.
With inputs from ANI