Since the Union Budget 2026 is just around the corner, expectations are running high in the Indian real estate sector, which contributed 13% of the country’s GDP in 2025.
Finance Minister Nirmala Sitharaman is set to present the Union Budget on February 1, and industry experts are hoping for big policy reforms and tax benefits, along with some infrastructure support to fuel housing demand, especially in the mid-income and affordable housing segments.
The Indian real estate sector is seeing rapid expansion. According to a report by the India Brand and Equity Foundation, “The sector is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021. The market is also expected to potentially reach a value of US$ 5-7 trillion by the year 2047, with the possibility of surpassing US$ 10 trillion.”
Here are the top budget 2026 expectations from the real estate sector.
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Mid-Income Housing on the Radar
After years of strong premium housing demand, experts say the market is now entering a more value-driven phase, where middle-class homebuyers will play a major role in spiking growth.
According to Square Yards Founder and CEO Tanuj Shori, the Indian housing market is gradually moving away from a luxury-led cycle.
He said, “The mid-income housing segment is likely to anchor future growth, as premium demand begins to stabilise. From Budget 2026, the industry expects a strong push towards affordability, including higher tax relief for middle-income homebuyers, increased interest deduction limits on home loans & continued investment in urban infrastructure.”
Shori added, “Recent housing launches have been heavily skewed towards high-ticket homes, and the upcoming budget should encourage supply in affordable and mid-market segments to create a balanced housing ecosystem.”
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Importance of Urban Infrastructure Development
Industry leaders also emphasised the importance of urban infrastructure development in unlocking real estate growth.
Embassy Developments COO (North & West) Parag Saraiya said, “The real estate sector has shown strong resilience and sustained growth in FY25-26, and Budget 2026 should continue to treat real estate as a key driver of urban sustainability and economic growth. The investments in metro rail networks, highways, and urban mobility projects help unlock land value, improve access between homes and job hubs, speed up project execution, and expand affordable housing supply.”
Such infrastructure spending also generates employment and creates multiplier effects across the economy.
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Tax Rebates and Affordable Housing Criteria Will Be In Focus
Budget 2026 could be helpful in reviving demand-side momentum.
“The government is expected to prioritise equitable real estate growth through policy incentives and tax rebates, while maintaining fiscal discipline.” said Badal Yagnik, Colliers India CEO & Managing Director.
He added, “Revising affordable housing definitions, especially for Tier I cities, could significantly boost residential demand. Rising land and construction costs have made current affordable housing price caps outdated, and an update could help more homebuyers qualify for benefits.”
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REITs, Sustainability and Retail Investor Participation
Another major expectation from Budget 2026 for real estate is a push towards real estate democratisation.
Badal Yagnik said, “Making REITs and SM-REITs more attractive could encourage retail investor participation, deepen capital markets, and bring more transparency to the sector. We also expect incentives for green buildings and sustainable construction, as environmental compliance and energy efficiency become increasingly important in urban planning.”
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