OPINION | Budget 2026 and the road ahead for housing and urban growth 

housing

As India gears up for the Union Budget 2026, the real estate sector once again finds itself at the crossroads, linking

policy, capital, and long-term urban transformation. The sector is rarely the loudest sector in fiscal debates, yet it remains one of the most deeply intertwined with how the economy functions and how cities take shape.  In that sense, real estate is less a standalone industry and more a connective tissue linking policy intent with lived reality.

Demand has showed surprising resilience

Over the past two years, the sector has shown a degree of resilience that few anticipated in the aftermath of global uncertainty and domestic recalibration.

Demand has held steady across housing segments, with premium and luxury markets continuing to find depth among buyers who value stability, quality, and long-term asset security.

Maturing ecosystem has helped

This sustained momentum has not been accidental. It reflects a period of regulatory maturity, improved governance, and a cautious rebuilding of trust between developers and homebuyers. The forthcoming budget therefore presents an opportunity to reinforce stability, improve affordability, and sustain the growth trajectory that the sector has carefully built over the past few years.

Sustaining housing and urban development

At the centre of industry expectations lies continuity. Long-term housing and urban development programmes work best when predictable, allowing developers, investors, and state agencies to plan with clarity. Consistency in flagship initiatives related to housing, infrastructure, and urban rejuvenation supports better project planning and steady employment across construction and allied industries.

Real estate’s multiplier effect—spanning cement, steel, logistics, interiors, and services—means sustained government backing has a ripple impact beyond the sector. A budget that reinforces continuity in these programmes would help maintain execution momentum and contribute to organised urban expansion.

Infrastructure-equivalent status will unlock patient capital

Granting housing “infrastructure-equivalent” status, along with tax rebates and incentives, would improve access to patient, long-tenure capital at lower financing costs. A stable policy framework would further enable developers, customers, and investors to structure funding and commit capital with confidence over the long term.

Enhancing affordability through market-aligned incentives

Affordability, however, remains the most delicate lever. Budgetary measures that enhance home-buying benefits, whether through interest-linked incentives or tax-related support, can meaningfully improve buyer confidence.

Importantly, aligning housing incentives with current market realities would ensure that policy benefits remain relevant to today’s homebuyers rather than being constrained by outdated benchmarks. Such alignment can help bridge the gap between aspiration and access, particularly for first-time buyers.

Furthermore, revision of affordable housing price capped at Rs 45 lakh is another key area that demands attention. Urban land and construction costs have evolved significantly over the past decade, and revisiting price thresholds to reflect present-day realities would allow more genuine end-users to qualify for benefits. For developers, this could encourage fresh project launches within the affordable and mid-income segments, improving supply where demand is structurally strong. A more contemporary definition of affordability would therefore support both homeownership and housing creation.

GST rationalisation to ease cost pressures

Taxation, particularly around construction inputs, continues to shape project viability in subtle but significant ways. Streamlining GST on construction-related items can help reduce cost pressures across the value chain, improve developer cash flows, and support timely project delivery. Over time, these efficiencies can lead to more competitive pricing for buyers while strengthening the financial health of projects. A simpler, more balanced tax framework would reinforce the sector’s ability to deliver at scale without compromising on quality or timelines.

A budget that builds for the future

What distinguishes the real estate sector today from its earlier cycles is its growing institutional character. Regulatory oversight has improved transparency, technology has reshaped transactions, and buyers are more informed than ever. From RERA-compliant disclosures to digital transaction platforms, the industry has embraced transformation. The upcoming budget can strengthen this evolution with progressive policy measures that focus on affordability, rationalisation and stability, while recognizing evolved market conditions and staying true to the vision of housing for all.

(Vijay Wadhwa, Chairman, The Wadhwa Group.)

Views are personal and do not represent the stand of this publication.