Budget a disappointment for affordable housing segment despite infra push, says industry

Budget 2026 disappoints affordable housing segment despite infra push: industry

• Real estate sector upset over no affordable housing support in Budget 2026-27
• Affordable housing share fell from 38% in 2019 to 18% in 2025, may drop to 12%
• Industry warns declining affordable housing may impact urbanisation and homebuyers

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While Union Budget 2026-27 reinforced the government’s commitment to infrastructure-led growth, the real estate sector said the absence of policy support for affordable housing was a big disappointment, warning that the segment, already under stress since the pandemic, could shrink further.

They praised the government’s infra push and measures such as introduction of City Economic Regions and Infra Risk Guarantee Fund in the budget.

ANAROCK Group chairman Anuj Puri said the budget delivered limited direct relief to real estate, offering instead indirect benefits through higher capital expenditure, manufacturing, MSMEs, tourism, high-speed rail corridors and green transition initiatives.

“From a real estate perspective, it has delivered limited direct but various indirect benefits, acting more as a growth catalyst than an instant rescue cavalry,” Puri said. He did flag lack of targeted measures for affordable housing, which he described as being “in free fall since the pandemic”.

According to ANAROCK data, the sales share of affordable housing has sharply declined, falling from over 38 percent in 2019 to 26 percent in 2022 and to around 18 percent in 2025.

Puri said the segment was in “urgent need of high-impact interventions”, particularly interest-rate stimulants for buyers and developers, to revive demand and supply.

“The absence of any direct announcement on affordable housing, especially around definition reset or fiscal support, is a disappointment, given its importance for urban housing supply and inclusive growth,” he added.

Echoing similar concerns, CREDAI national president Shekhar Patel said developers welcome the continued emphasis on infrastructure spending but was “deeply disappointed” by the lack of concrete measures for affordable housing.

“With the current outdated definition of affordable housing, CREDAI estimates that the segment’s share could decline further from 18 percent to nearly 12 percent of total housing supply,” Patel said, calling it a “serious warning sign” for India’s lower middle class and middle-class homebuyers.

Affordable housing should not be viewed as a welfare initiative, he said.

“Affordable housing is economic infrastructure. It is a major driver of employment, consumption and social stability,” he said, warning that rising construction costs and land prices, without policy support, are pushing developers away from the segment.

Industry experts cautioned that a continued decline in affordable housing supply could lead to higher rentals, longer commutes and the expansion of informal housing, undermining the goal of inclusive and sustainable urbanisation.

While the Budget’s focus on REIT-led monetisation of CPSE commercial assets, data centres, temple towns and Tier-2 and Tier-3 city growth is expected to boost commercial real estate and urban expansion, developers said affordable housing remains the missing piece in the government’s housing and urban growth strategy.

CREDAI urged the government to give urgent policy attention to affordable housing to prevent long-term structural damage to India’s urban housing ecosystem.