Budget 2026 focuses on infrastructure and urban development, keeping real estate prices steady to rising, with no direct relief for homebuyers.
Union Budget 2026 boosts infrastructure and Tier II cities, supporting real estate growth but offering no immediate tax or price relief.
Budget 2026: The Indian real estate sector received mixed results from the Union Budget 2026-27, which Finance Minister Nirmala Sitharaman presented. The infrastructure development, Tier II/III city development, and urban supply expansion receive priority funding, but no direct price reductions and significant tax advantages exist for metro and premium segment buyers.
The budget failed to deliver the expected increase in home loan deductions and GST reductions, which would have improved residential buyers' affordability according to budget projections. Entry-level homes and luxury apartments are likely to maintain their current price trajectories. The introduction of funding mechanisms for dormant projects will result in enhanced market stability throughout the upcoming years.
The government plans to expedite the monetisation process for CPSE real estate assets through designated REITs, which will generate funds needed to resume suspended urban redevelopment projects. The allocation of ₹5,000 crore per City Economic Region (CER) throughout five years will focus on cities with populations exceeding five lakh to develop rental housing and InVITs and funding for infrastructure projects through challenge-mode.
This supply-focused approach aims to increase housing availability in Tier II/III cities, which will lead to lower price pressures and better housing options for middle-class buyers who reside outside of metropolitan areas.
The government plans to raise its capital expenditure by 9%, which will result in a total budget of ₹12.2 lakh crore to improve roads and essential facilities and city development projects that will meet the demands of Tier I and Tier II cities. Mumbai and Delhi will experience a 10-15% increase in metro prices because of their strong sales growth for FY25, while Tier II cities will benefit from better planning and supply, which will lead to permanent value increases.
Experts suggest long-term benefits via the Infrastructure Risk Guarantee Fund, supporting developers and jobs. While luxury real estate may thrive, middle-class buyers may find better opportunities in Tier II cities for future growth and urban investment.
Disclaimer: The information provided is based on Budget 2026–27 announcements and available public reports.
