Union Budget 2025-26: A Turning Point for Affordable Housing and Real Estate Growth

As the Union Budget 2025-26 approaches, India’s real estate sector finds itself at a pivotal juncture, with high hopes pinned on measures that could reinvigorate affordable housing. Once a thriving segment, affordable housing has struggled to regain its footing in the post-pandemic era.

Industry leaders are advocating for initiatives like the reinstatement of tax holidays, enhancements to credit-linked subsidy schemes, and revised affordable housing standards to breathe life into this crucial sector. These measures are not only necessary for housing but also hold the potential to stimulate economic growth, foster job creation, and fortify infrastructure development across the country.

The Bigger Picture: Economic Stability and Growth

While tax incentives remain a perennial ask, the focus this year is expected to shift towards long-term resilience through infrastructure development. Though infrastructure projects may not yield immediate benefits for end-users, they are pivotal to creating a robust foundation for sustainable growth in the real estate sector.

The Union Budget is also anticipated to address broader economic concerns. With sluggish GDP growth over the past two quarters, the government is likely to announce stimulus measures aimed at supporting SMEs, MSMEs, and skill development programs, alongside initiatives to bolster job creation. These efforts will not only stabilize the economy but also pave the way for a more vibrant real estate market.

Affordable Housing: A Sector in Need

Among the most pressing concerns for the real estate sector is the revival of affordable housing. The once-promising segment has faced significant challenges, underscoring the urgent need for targeted interventions.

Industry stakeholders are calling for tax incentives to boost supply and make housing purchases more accessible. However, the hurdles extend beyond taxation. A critical issue remains the scarcity of urban land, particularly in regions where affordable housing is most urgently required. Addressing these land shortages through policy interventions and urban planning is key to ensuring the success of affordable housing initiatives.

As the Budget nears, the real estate sector’s hopes are set high. With the right policies and investments, this could mark a turning point not just for affordable housing but for the broader ambitions of economic growth and infrastructure development.