Budget 2026 a 'disappointment' for real estate sector: Experts

Real estate industry experts flagged lack of measures to revive the sluggish affordable housing demand in the Union Budget 2026-27. "A major disappointment for the real estate sector was that there were no major announcements for affordable housing, which has been in free fall since the pandemic,” said Anuj Puri, Chairman of ANAROCK Group.

ANAROCK data indicates that the sales of affordable housing plummeted after the pandemic - from over 38% in 2019 to 26% in 2022 to just around 18% in 2025.

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“The affordable housing segment was in express need of direct intervention by way of interest stimulants for buyers and developers of affordable housing,” Puri said, adding that the segment needed high-impact measures. The absence of any direct announcement on affordable housing - particularly around definition reset or fiscal support - is a disappointment, given its importance for urban housing supply and inclusive growth, Puri said.

Agreed, Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India. “Disappointingly, the Budget does not introduce any real estate-specific fiscal incentives, especially to boost affordable housing in India, which has already been a cause of concern for the sector,” Baijal said.

Baijal, however, added the focus on selective opportunities in Tier II and Tier III growth corridors, and connectivity in urban economic regions, provides a supportive backdrop for demand in residential and logistics markets over the medium term.

Finance Minister Nirmala Sitharaman, in her Budget speech, proposed to accelerate recycling and monetisation of significant real estate assets of CPSEs (central public sector undertakings) through the setting up of dedicated REITs (Real Estate Investment Trusts).

“The decision to include assets of Central Public Sector Enterprises (CPSEs) into the Real Estate Investment Trust (REIT) structure is a significant shift and is likely to have a multi-layered impact on the market from deepening the market, as these entities have large assets, to increasing the participation of institutional investors, including mutual funds,” said Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE.

Dedicated REITs to recycle Central Public Sector Enterprise (CPSE) assets targets Rs 10 lakh crore assets among railway properties, port land, power transmission infrastructure, telecom towers, government properties, said ANAROCK’s Puri. “The objective is to attract institutional capital without surrendering control over these assets and generate recurring revenue for CPSEs. This supports industry demands for simplified REIT taxation and expanded participation of small and medium REITs,” Puri explained, adding it will deepen institutional capital in Indian real estate infrastructure.

To enable critical infrastructure and boost investment in data centres, Sitharaman proposed tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India. It will, however, need to provide services to Indian customers through an Indian reseller entity, the finance minister said.

The tax holiday for foreign cloud companies setting up data centres here till 2047 is likely to remove the single biggest friction point for global hyperscalers entering India, said CBRE’s Magazine. “This is likely to act as a massive catalyst for the asset class. We expect global capital inflows into the sector to increase substantially after this announcement,” he added.