Budget 2026: Funding urban infra, incentives for affordable housing among key demands of real estate sector

As India gears up for Union Budget 2026, the real estate sector is optimistic about potential reforms that could significantly benefit both homebuyers and the industry. Stakeholders are particularly eager for policies that address the challenges developers face while also catering to the evolving needs of buyers. With India's economy on a growth trajectory, interest in residential real estate as a long-term investment is rising among homebuyers. Yet, affordability continues to pose a significant hurdle for many. Therefore, a broader definition of affordable housing in urban areas is crucial; this will not only benefit homebuyers but also stimulate stronger demand from end users. 

Moreover, there’s a compelling case for providing interest subsidies for first-time buyers who currently do not qualify for affordable housing benefits. Such measures could greatly enhance sales in the sector. The real estate industry is also advocating for a re-evaluation of GST on under-construction homes and expedited approvals to minimize project delays. 

Here's a look at what industry voices expect from the Budget 2026.

Badal Yagnik, CEO & Managing Director at Colliers India said, "Standardization and revision of affordable housing criteria to reflect price reality of Tier I cities can provide a demand-side boost to residential real estate. Also, supply side push through infrastructure augmentation and capacity building can trigger long-term growth levers across real estate segments. Furthermore, real estate democratisation and retail investor participation can be encouraged by making REITs and SM-REITs more attractive. While Indian real estate is at the cusp of an accelerated growth trajectory across asset classes, the upcoming budget should incentivize sustainability adoption in built structures and holistically revitalize urban development plans. Most importantly, the budget needs to lay the foundation for sustained long-term growth, cushioning the impact of global volatility and trade frictions to an extent."

Tanuj Shori, Founder and CEO, Square Yards said,"The Indian housing market is clearly moving out of a luxury-led upcycle and into a more value-driven phase, with the mid-income segment poised to anchor growth as premium demand begins to stabilise. From the 2026 Union Budget, one should expect a sharper focus on improving affordability through enhanced tax relief for mid-income homebuyers, higher interest deduction limits and sustained investment in urban infrastructure. Equally important is policy support that encourages supply in the affordable and mid-market segments, as recent launches have been disproportionately skewed towards higher ticket sizes. A budget aligned to these realities can strengthen end-user demand, improve price-to-income dynamics and support a more balanced and sustainable phase of urban housing growth."