Union Budget 2026 Draws Contrasting Reactions from Real Estate Industry
The Union Budget 2026 has elicited a mixed response from India's real estate sector, revealing a clear divide between concerns over affordable housing policy and optimism about infrastructure-led growth. While industry stakeholders expressed disappointment about the lack of specific measures for affordable housing, several experts welcomed the government's continued emphasis on infrastructure development as a catalyst for expanding real estate markets beyond saturated urban centers.
CREDAI Voices Deep Disappointment Over Affordable Housing
The Confederation of Real Estate Developers' Associations of India (CREDAI), representing approximately 15,000 developers nationwide, expressed significant concern about the Budget's approach to affordable housing. National President Shekhar Patel stated that the government had failed to address long-standing issues facing this critical segment.
"Deeply disappointed that the Budget offers nothing concrete for affordable housing," Patel remarked, highlighting what he described as a missed opportunity to support economic infrastructure that drives employment, consumption, and social stability.
According to CREDAI's analysis, the absence of incentives for affordable housing, coupled with unchanged definitions and rising construction and land costs, could reduce the segment's share in total housing supply from 18% to approximately 12%. Patel warned that this decline represents "a serious warning sign for India's lower middle class and middle class" and could lead to higher rentals, longer commutes, and increased informal housing development.
Infrastructure Focus Receives Positive Industry Response
Despite concerns about affordable housing, CREDAI and other industry voices welcomed the government's substantial infrastructure investments outlined in Budget 2026. The association noted that investments in highways, metro rail projects, logistics corridors, railways, and urban infrastructure would strengthen connectivity and create new growth corridors with long-term benefits for real estate development.
Navin Dhanuka, director at ArisUnitern, characterized the Budget as "a clear shift from short-term cyclical support to building a durable growth backbone for Indian real estate." He emphasized that the focus on infrastructure, City Economic Regions, and industrial corridors creates a virtuous cycle connecting job creation, housing demand, and urban expansion.
"By widening the geographical footprint of cities, the Budget enables housing growth beyond saturated urban cores into well-connected peripheral and Tier-2 markets," Dhanuka explained, highlighting how improved connectivity could decentralize real estate development.
Capital Market Enhancements and Long-Term Outlook
Industry experts also noted positive developments in capital market mechanisms that could benefit real estate financing. The enhancement of Real Estate Investment Trusts (REITs) and municipal bonds was seen as a step toward improving long-term funding transparency and availability.
Dhanuka added that these measures, combined with infrastructure investments, collectively reduce execution risks, reinforce buyer confidence, and foster a more resilient real estate cycle focused on end-user needs rather than speculative investment.
The mixed reactions to Union Budget 2026 reflect the complex challenges facing India's real estate sector as it balances immediate affordable housing needs with long-term structural growth opportunities through infrastructure development and market expansion.
