As India prepares for Union Budget 2026, the real estate sector is looking for policy clarity to address widening structural imbalances across housing markets. While luxury and premium residential segments continue to attract capital and buyer interest, affordable and mid-income housing critical to urban workforce stability remains under strain from rising land prices, construction costs and regulatory delays.
This divergence has sharpened expectations from the upcoming Budget, particularly around taxation, financing access and urban infrastructure investment. Market analysts say the challenge before policymakers is no longer demand creation alone, but restoring balance across income segments without destabilising growth in higher-value markets. Industry stakeholders broadly agree that policy predictability has become as important as fiscal incentives. Developers point to fragmented tax treatment on construction inputs, uneven compliance norms across states and approval timelines that continue to stretch project delivery cycles. These factors, they argue, disproportionately impact mid-scale and affordable projects where margins are thinner and financing costs more sensitive. Housing economists also flag that many buyer-linked tax benefits have failed to keep pace with current urban realities. Property prices and loan sizes in major cities have risen sharply over the past decade, yet eligibility thresholds and deductions remain largely unchanged. This mismatch has reduced the effectiveness of incentives aimed at first-time buyers, particularly younger households entering the market later in life.
Infrastructure spending remains another central expectation. Urban planners note that residential demand increasingly follows transport corridors, utility upgrades and social infrastructure rather than traditional city cores. Continued investment in metro rail, road connectivity and peri-urban services is seen as essential to unlocking new housing supply while easing pressure on central districts. There is also renewed focus on project completion and delivery risk. Stalled developments continue to affect buyer confidence in several urban regions, highlighting the need for targeted mechanisms that enable timely completion without creating moral hazard. Policy observers suggest that structured revival frameworks, aligned with transparent oversight, could stabilise stressed assets while protecting homebuyers. From a sustainability perspective, the Budget is also expected to influence how future housing stock is built. Energy-efficient construction, compact urban form and better integration of housing with public transport are increasingly viewed as economic necessities rather than environmental add-ons. Long-term urban resilience, experts argue, depends on aligning fiscal policy with climate-responsive planning.
As Budget 2026 draws closer, expectations across the sector remain measured rather than transformational. The prevailing view is that steady, execution-focused reforms rather than sweeping announcements will determine whether India’s housing market can support inclusive urban growth while maintaining financial discipline. The coming fiscal framework will signal whether housing policy can evolve from cyclical stimulus to structural stability.
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