India’s real estate sector is raising concerns over the future of low-cost homes after the latest Union Budget offered no targeted measures to expand affordable housing supply or stimulate buyer demand. Industry representatives say the absence of policy clarity could accelerate a slowdown in new launches aimed at lower- and middle-income households, with implications for urban equity and labour mobility across major cities.
The national developers’ association, which represents thousands of real estate firms, has indicated that affordable housing already accounts for a shrinking share of new residential projects. Without updated incentives or a revised policy framework, industry estimates suggest this segment could contract further over the coming years, even as urban populations and rental pressures continue to rise. Urban economists point out that the current definition of affordable housing has not kept pace with land prices, construction costs or income realities in fast-growing metropolitan regions. As a result, many projects that cater to first-time buyers fall outside eligibility for incentives, weakening the business case for developers. The concern, analysts say, is not limited to market dynamics but extends to broader urban outcomes such as longer commute times, informal housing growth and increased pressure on civic infrastructure.
Senior industry office-bearers have argued that affordable housing policy should be viewed as economic infrastructure rather than a social concession. Housing construction supports a wide employment chain, from on-site labour and materials manufacturing to transport and services. A sustained decline in this segment could therefore affect job creation and consumption at a time when cities are expected to absorb large numbers of new workers. At the same time, the association acknowledged that the Budget’s continued emphasis on infrastructure investment offers indirect benefits for real estate and urban development. Expanded spending on highways, metro rail, logistics corridors and urban services is expected to improve connectivity, open new development zones and reduce congestion in core city areas. Urban planners note that such investments can help distribute housing demand more evenly, provided land-use planning and housing policy move in tandem.
The Budget’s focus on regulatory reforms and digital governance has also been seen as a positive signal. Faster approvals and streamlined processes could lower project timelines and financing costs, which ultimately affect housing prices. However, developers caution that process efficiency alone may not be sufficient to revive affordable housing supply without fiscal or regulatory support aligned to current market conditions. Looking ahead, housing policy specialists suggest that a recalibrated affordable housing policy will be essential to ensure inclusive and climate-resilient urban growth. As cities expand, the challenge will be to combine infrastructure investment with housing strategies that keep homes accessible to essential workers while limiting sprawl and emissions. Whether future policy interventions address this gap will shape not just the housing market, but the social and economic fabric of India’s urban regions.
CREDAI Sees Housing Gaps After Union Budget
